Do I need business terms and conditions?

All businesses benefit from the safety net of terms and conditions. We look at why it matters and how you can reduce your legal risk.

Wooden figures shaking hands in agreement symbolising terms and conditions

Some businesses operate for years without any standard terms and conditions in place. This is all well and good… until something goes wrong in their dealings with a client. Then the safety net of a robust set of terms and conditions is what all businesses need. Having a tailor-made set of terms and conditions specifically for your business also makes you look professional and business savvy.

What are terms and conditions?

Sometimes referred to as T&Cs, terms of business, or terms of sale, this document will record everything about your relationship with clients up front to reduce any future disputes. All parties will know from the outset what is expected of each other: what good/service is being delivered and when; when payment is required; and how/if a party can terminate the relationship. They should also contain and important provisions to protect your business, such as what information needs to be kept confidential, any limitation to your liability, and the extent to which your clients can (and cannot) use your intellectual property.

Does my business need T&Cs?

Whether you are selling goods or services, and whether you are selling to other businesses or consumers (or even both!), a good set of T&Cs is always recommended for all standard business transactions you enter into.  This will help to protect you from liability, non-payment and disputes generally.  It should vastly reduce your legal risk.

Are there any special considerations?

If your clients are mainly consumers, there is a wealth of UK consumer protection laws that needs to be adhered to.  There are certain things that need to be included in T&Cs aimed at consumers, such as their statutory right to change their mind on certain contracts for a certain period of time, information requirements that businesses must abide by, and of course data protection (GDPR) requirements.

Do I need my clients to agree to the T&Cs?

Yes – without agreement the client is not bound to the terms and conditions and an unambiguous acceptance is better than attempting to rely on the client’s conduct.  How you communicate with your clients will determine how you enter into an agreement.  For example, a lot of online businesses require their clients to click to accept their terms and conditions when a sale is concluded online.

Can’t I just use the T&Cs that I found on another supplier’s website?

Unfortunately not – this may be copyright infringement and also those terms and conditions may not be applicable to your type of business, goods or services. The terms you plagiarise could even be drafted for use in a different jurisdiction in which different laws apply (for example US T&Cs would not cover issues raised by UK legislation).

What types of terms should be included?

When preparing your standard set of business terms there are certain clauses that will always need to be included, such as:

– details of the subject matter of the contract/definitions: this sets out the basis of what is being agreed between you and your client

– details of the services/goods being sold

– the price

– method and timing of payment

– for sales of goods: carriage, delivery, risk and insurance

– for service contracts: service obligations such as service levels, reporting, testing, staff to be used, etc.

– warranties and disclaimers: often these include promises by each party as to what is being provided (and can also include disclaimers as to what is not included)

– term and termination provision: how and when the business relationship starts, how long it is to last and when it can be ended.  This could include ensuring some level of commitment from clients

– limitation of liability: so that you are not exposed to an unlimited financial risk in the event that something goes wrong

– protections for the assets of your business: including confidentiality, intellectual property and non-solicitation clauses

– an indemnity from your clients: to protect you from any losses caused by their wrong doing

data protection and privacy: including compliance with GDPR

standard boiler plate clauses: such as how to deal with disputes, which law governs the terms, and whether or not any of the rights in the agreement can be transferred to anyone else

– additional provisions that are applicable to your specific goods/services: such as relevant statutory rights like consumer protections.

Can we help you?

Yes, we have expertise in drafting terms and conditions for all sorts of businesses.  We would start by getting to know your business, the services/goods you sell and to whom, how you operate and so on.  This will enable us to ensure that all the relevant legislation is catered for in your T&Cs and that you are well protected.  We can also advise you on steps you should take to ensure your terms and conditions are accepted by your clients. Contact our Commercial team for more information.

This article was written by Clare Veal

Please note the contents contained in this article are for general guidance only and reflection the position at time of posting. Legal advice should be sought before taking action in relation to specific matters.

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