We’ve all done it, where we’ve reached the terms and conditions page, clicked “I agree,” and moved on without reading a word. But when it comes to your own business, those terms are anything but something to skip past.
Written terms and conditions are vital for business operations. They offer protection in disputes, act as a safeguard against claims, support risk management, and perhaps surprisingly can even help lower your professional indemnity insurance costs. They also enhance your business credibility, showing clients and suppliers that you take things seriously.
So what do you actually need to know?
What are Terms & Conditions and why do you need them?
At their core, terms and conditions are part of a contract formed through an offer and acceptance between the parties. For businesses, they outline the relationship with clients or suppliers. Without them, the full details of what has been agreed can be difficult to prove and that ambiguity can become very costly, very quickly.
Is there a Business to Business or Business to Consumer relationship?
Before anything else, it is important to consider whether your clients are businesses, consumers, or both. If they are consumers, your terms must comply with consumer rights legislation, which carries its own specific requirements. This guide focuses on business-to-business agreements, but if you deal with consumers too, it is worth taking separate advice on that side of things.
What is the best approach?
Even in business-to-business arrangements, clear and unambiguous terms and conditions are essential to define agreements and minimise disputes. A formal written contract incorporating those terms is the best approach, and your team should be trained to ensure they are properly applied in practice. It is no good having well-drafted terms if the people in your business who are entering into contracts do not know to use them.
When do you provide Terms & Conditions?
Earlier than you might think. The best approach is to provide a formal written contract with all terms and conditions at the outset, before the contract is formed. Sending terms with an invoice is often too late, as that usually follows the contract’s formation. You also need to ensure the other party has had reasonable notice of the terms before they accept them.
Whose Terms & Conditions apply?
This is where disputes commonly arise. Both parties often believe their own terms and conditions apply to a contract. To avoid this, draft your terms carefully, be aware of pre-contractual communications, and watch for the other party attempting to impose conflicting terms of their own, for example, confirming an order but stating it is subject to their terms. If the matter ends up before a Court, previous communications and conduct between the parties will all be taken into account.
When should you review your Terms & Conditions?
Terms and conditions often go unreviewed until a dispute arises, by which point it can be too late. It is best practice to review them regularly, especially when laws or industry changes occur. Avoid using outdated terms that may not reflect your current relationships or operations. And remember: once a contract has been formed, new terms cannot be introduced without the agreement of both parties.
The bottom line
Getting your terms and conditions right is not about being overly cautious, it is simply good business practice. They define what has been agreed, protect your position if things go wrong, and demonstrate to everyone you work with that you operate to a high standard.
Our solicitor Emma Locking has put together a free guide covering all of the above in plain, practical terms. Download it below and get in touch if you would like to discuss your own terms and conditions.
Download guide here
Emma Locking – Solicitor, Corporate & Commercial 01844 399 782 | elocking@lightfoots.co.uk
Please note that the information in this article is not designed to provide legal or other advice or create a solicitor-client relationship. No liability is accepted for any loss caused in reliance upon its content and you should not take or refrain from taking action based upon the same.