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Terms and Conditions of Business
Terms and Conditions of Business
Most businesses will enter into commercial and contractual relationships on a daily basis, but have you ever considered the terms on which you are contracting? Have you agreed to the terms and conditions of the other party or have you successfully incorporated your own terms into the contract? A simple solution for contracting on your terms is to have your own set of terms and conditions that can be used for those contracts that your business enters into.
Why do I need terms and conditions?
For every business, terms and conditions are vital when it comes to protecting you from risk and reducing your exposure. It is crucial that your terms and conditions are reviewed by a legal professional and, where necessary, refreshed to ensure that they are up to date and reflective of current industry practices and legal requirements.
Terms and conditions provide your customers with the details of how you will supply your goods and/or services and should be provided at the outset of a transaction. They set out the responsibilities of each party as well as their rights and obligations, and if drafted correctly, should limit your financial exposure and exclude certain liabilities and heads of loss. In addition, they can be used to standardise your procedures enabling you to trade with your customers on consistent terms whilst avoiding the time and expense involved in drawing up specific terms for individual transactions
Why should terms and conditions regularly be refreshed?
It goes without saying that your terms should be bespoke and tailored to your business, addressing the specific risks that may arise. However, once your terms and conditions have been drafted, it is crucial that these are monitored on a regular basis to ensure that they encompass any changes to the law or your own business practices. A failure to regularly monitor terms and conditions has led to some businesses exposing them themselves both legally and financially, due to working with outdated terms.
What are the key terms?
The following are just some of the key terms that we would expect to be addressed in your terms and conditions:
- Price and Payment terms: Does your customer know when payment should be made to you and the consequences of late payment? Do your terms include provisions for reviewing, varying and/or increasing your prices?
- Customer responsibilities? Of course, as the service provider, most obligations fall on you, however, consider whether you rely on the customer for any information or co-operation or if they have any additional responsibilities linked to the transaction.
- Delivery: Your terms and conditions should include clearly stated terms relating to delivery and/or performance including the place and time of delivery. Do you offer your customers a fixed delivery date or do you give yourself some flexibility?
- Liability: This is one of the most crucial pieces of protection you can include in your terms conditions. A liability cap can reduce your risk by limiting your financial exposure whilst also excluding certain heads of loss and damage. Without such a clause, should you find yourself in a position where you are liable to a customer, for example, for damages due to a breach of contract, without this clause your liability will be unlimited and will be irrespective of any liability insurance you may hold.
- Guaranties or warranties: Do your products and/or services come with any applicable guarantees or warranties.
- Termination provisions: Consider what events should trigger termination (for example, a material breach by the other party) and the consequences of early termination by them.
- Force majeure: Force majeure clauses provide that if an event beyond the control of the parties occurs, the contract may be suspended. In some cases, it may even be terminated without any further liability being incurred by the parties. Careful drafting of this clause can ensure that pandemics and other international incidents could constitute a force majeure event if your business is likely to be adversely impacted by such events.
- Governing law: Any references to any laws that will no longer be relevant to UK agreements will need to be revisited and amended to ensure the correct law is referenced.
How can we help?
As we say above, terms and conditions can be vital to the protection of your business. Berry Smith consistently draft, advise and review terms and conditions for our clients, whether it be in relation to the first set of terms and conditions our client is putting in place or to update and refresh existing terms and conditions.
If you have any queries or need any assistance relating to terms and conditions, please do not hesitate to contact us at firstname.lastname@example.org or on 029 2034 5511.
Get In Touch Today
If you would like a no obligation discussion, please feel free to contact us either by phone on 02920 345511 or emailing us below.