What you need to know about Business Terms & Conditions
You cannot expect customers to be bound by your business terms if you do not tell them what they are! Effective T&C’s help prevent late payment and provide a means of resolving disputes which arise during the course of business, however, if they are not correctly applied they will be next to useless.
When providing goods and services to your customers, you should always present terms and conditions in advance of providing the goods or services. T&C’s generally form the basis of contracts between businesses and their customers. In their simplest form, Terms and Conditions establish a set of rules governing a transaction. The obligations of the parties to the transaction will be set out - ideally leaving no ambiguity.
Why should your business have terms and conditions?
Whether you are selling goods or services, its important to have a properly written set of terms and conditions to protect your business interests. T&C’s essentially set out an agreed way of doing business and provide a method of resolving any issues or problems with the service (or goods) supplied by you.
Issue T&Cs to your customers will result in:
Smoother sales process
Clearer method of resolution for any problems which may arise
Although T&C’s can be drafted in a way that is favourable to your business, there are certain terms which are governed by legislation so not everything can be covered in an agreement. It is important to ensure that your customers are actually aware of all the terms of a sale in order for them to be effective and relied upon.
What terms should you include?
This is largely dependent on the type of business have and the service or goods that you are providing to your customer. A software developer will have a significantly different set of considerations compared to a beauty salon. It is therefore vital that you identify any industry related scenarios and address these in your term.
Key considerations include:
Product - what are you selling?
Payment - what should you be paid, when and how?
Delivery - when is the service/product to be provided?
Liability - if something goes wrong, do you provide any guarantees or warranties?
Termination of the relationship (how long is your customer bound to any service agreement)?
Businesses waste a lot of time and money collecting and chasing debts. There are statutory recourse for late payment, but it is far better to agree on when you will be paid in advance to avoid any legal disputes and expenses. Who wants to spend 100’s of pounds in legal fees chasing a £500 debt from a customer?
By setting out payment terms is agreed document in advance of the provision of services (or goods) will mean that both you and your customers will share the same expectation.
Why do I need to apply terms and conditions?
Effective T&C’s help prevent late payment and provide a means of resolving disputes which arise during the course of business however if they are not correctly applied, they will be next to useless.
If your customers, suppliers or business partners were not aware of your T&C's at the outset of any contract of business relationship, it will be difficult to apply them retrospectively, which is why it’s crucial to set out and follow a process.
Many a client has informed me that they issue their T&C’s at the back of their invoice; in most circumstances invoice are issued post provision of service/supply of goods. The T&C’s cannot be relied upon in these situations as they T&C’s were provided to the customer post performance of the contract.
Business vs Consumer Customers
If you are dealing with another business, you should always ensure that your terms are accepted as part of a signed agreement or contract. Businesses are deemed to be capable of dealing with more complex T&C's than consumers, so this gives you a chance to set out exactly what you expect from the contract. You may find, depending on the service being provided, that you have to deviate slighting from using standard T&Cs. Your business customers may request amendments to your standard terms.
Dealing with a consumer client bases can be tricky. There are various implied terms that Consumers have - also known as statutory rights - which are applied to consumer contracts by the Sale of Goods Act and the Supply of Goods and Services Act. These cannot be overridden by your own business terms, unless they are more favourable to your consumer customers. There are statutory rights if a consumer buys from you online, including a cooling off period, during which they can decide to cancel the contract. When it comes to applying other terms not covered by consumer law, you must always make sure these are made very clear before the contract is formed, particularly if they could be considered onerous.
Whatever the commercial documentation, agreement or contract your business needs, our lawyers at Walker Rose Solicitors ensure certainty that our advice is always precise, resilient and affordable and the legal documentation will assist protect you and your business.
Walker Rose Solicitors provides astute legal advice and the drafting of legal agreements, polices and documents to address your immediate and on-going business needs.
We can assist, negotiate and draft agreement terms with the co-founders, investors, employees, suppliers and customers.
We can assist whether you are a new start-up or an established business. We work for you to design ‘best practice’ doctrines ensuring and securing a smooth running and efficient workplace.
Walker Rose Solicitors provide sensible commercial legal advice and draft the agreements you need in place to reduce areas of dispute or at least provide a mechanism for the parties to resolve a dispute. We can help you grow and evolve safe in the knowledge that you, your business and your brand are protected and stand on a strong legal ground to move forward.
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