What are terms and conditions?
Terms and conditions are a contract between your company and your customers. It is vital to have the correct terms and conditions in place to limit your liabilities and protect your rights. Having a robust set of terms and conditions could be pivotal to the success of your business. It is important to know if your customers are businesses or consumers so that your terms and conditions can be drafted accordingly.
Do I need terms and conditions?
Without terms and conditions, there is a high chance of misunderstandings and potential disputes between you and your customers. Well-drafted terms and conditions can mitigate potential liabilities and provide peace of mind by setting out the provisions under which you want to do business. This is particularly useful to aid with cash flow as you can set out clear payment terms and reduce the need for debt recovery which can be expensive.
Do terms and conditions have to be in writing?
Whilst terms and conditions are not required to be in writing to be valid, it is best practice to have them in writing to avoid any dispute as to whether they have been accepted.
Terms and conditions should be clearly pointed out to customers before they enter into a transaction with you. For example, having them clearly marked on your website, or having a pop-up box with an ‘I accept’ button before any customers proceed to checkout.
How do business to business terms and conditions differ from business to consumer?
Consumers have more rights than businesses when it comes to contracts thanks to the Consumer Rights Act 2015. Businesses, on the other hand, are expected to have more knowledge and experience in business dealings hence the lower protection. The ‘buyer beware’ approach should be adopted by businesses to avoid clauses like ‘rollover clauses’ which can see a business stuck in an automatically renewed contract if it is not cancelled in time.
You may be familiar with the 14-day ‘cooling off period’ which allows a consumer to cancel their purchase and get their money back in certain circumstances. This, however, does not apply to business-to-business transactions.
What about battle of the forms?
When both parties try to impose their own terms and conditions, it can sometimes be difficult to identify whose terms actually prevail. The general stance is that it is those of whoever had the last say regarding terms before the contract was concluded. This is known as the ‘last shot doctrine’. The last shot doctrine can be avoided with deliberate and careful drafting by creating an overarching ‘master agreement’ within the terms and conditions.
What if I don’t have terms and conditions?
You may have been fortunate enough to have had minimal disputes with your customers. There is, however, always the risk of a dispute arising. It is best business practice to have terms and conditions in place to protect your cash flow and reputation.
Navigating terms and conditions on your own can be tricky. As consumers have more protection than businesses, it is important that your terms and conditions are drafted carefully to be legally enforceable. Careful drafting can also ensure that you avoid having the terms and conditions of others imposed upon you via the ‘last shot doctrine’. The clearer and more understandable your terms and conditions are, the more likely they are to be upheld.
If you have any questions regarding terms and conditions or need advice on any company or commercial issues, please contact Erica Hurst, Paralegal in the company and commercial department at Rothera Bray on 03456 465 465 or by email to enquiries@rotherabray.co.uk
Disclaimer: This blog is for information only and does not constitute legal advice. If you need legal advice please contact us on 03456 465 465 or email enquiries@rotherabray.co.uk to get tailored advice specific to your circumstances from our qualified lawyers
