Spoiler alert: if you don’t use Terms & Conditions properly, you’re leaving yourself open to risk.
Business transactions, regardless of the type, are governed by commercial contracts – often referred to as Terms & Conditions, T&Cs, terms of business. Whatever it is called, it means it is contractual obligation to do, or provide something for a certain payment.
Unless this contract is in writing, the terms of your agreement with your customer or supplier – even important terms, like payment – can be governed by statutes such as the Sale of Goods Act 1979 or by what was agreed between the parties.
When a problem arises, the key questions are always come down to a) what was in the contract? and, b) what was agreed? The only way to make sure the answers to both a) and b) match up is if it’s in writing.
The majority of the court cases we deal with for businesses relate to contract, usually in the form of Terms & Conditions. Specifically, normally, the lack of them, so we know how things go wrong and what to avoid.
What needs to be in T&Cs to make an effective contract?
- T&Cs need to be sent out for every piece of work or product sold, before the work has started.
- The person who receives the T&Cs needs to be sufficiently senior to bind the customer to the terms – if you are dealing with a receptionist, consider asking for someone senior to confirm that they are happy.
- If you receive T&Cs, or any form of correspondence trying to set out the terms, consider whether you are happy with those terms or ask for confirmation that your terms will be superior.
- T&Cs need to be clear on when payment is due and what will happen if payment isn’t made on time.
- Who the customer is needs to be clearly identified on invoices – if the wrong person or business is named, then an invoice may not yet be payable. Consider who is the contract actually with? Who would you have to take to court to get paid?
- Review your T&Cs at least every 5 years to ensure they reflect your business practices.
Wait… 6 things?
Were we contractually obliged to give 5 things? Is the 6th a breach of contract? Is getting more a bad thing? The answer is, it depends on what was agreed!
Sure, it might sound ridiculous, but the above are genuine questions to consider about your contracts when a dispute arises – and this is just a glimpse into the points we consider when looking at T&Cs for our clients.
Discover what makes us better: get in touch with us for a free review of your Terms & Conditions.
Importantly, Amgen Law has provided this Insights article for information only and nothing in it should be constituted as legal advice. However, if you would like to discuss any of these issues further about a legal matter that is affecting you, please get in touch with us directly using the form below.