Why are terms and conditions so important?

Whilst it is not a legal requirement for your business to have a set of written T&Cs, in the event of a dispute with a customer, client or supplier, your business will be in a much stronger position if armed with a set of terms to rely on.

If a new business is set up without a set of standard terms, it will be difficult to clearly show what they have agreed to provide or illustrate that a customer, client or supplier has breached your terms. 

What should be included within your business’ terms and conditions?

A typical set of T&Cs may include:

• The relevant law governing the transaction.
• Payment terms including when payment will fall due.
• Consequences of late payment such as details of any interest which will accrue.
• Any relevant guarantees or warranties.
• A clear explanation of what products/services you are providing.
• Any timelines for delivery of the product/services.
• What action can be taken if you do not deliver the goods or the customer does not pay promptly.

There is no one size fits all approach to what terms and conditions a business should have and these should be tailored to the specifics of your business, but having a clear and robust set of T&Cs will avoid ambiguity and misunderstanding about what services you are providing, and the reciprocal obligations owed by your business, your clients, customers and suppliers.

Are terms and conditions legally binding?

The short answer is no. T&Cs are not automatically legally binding. When compared with contracts themselves, T&Cs are often not signed and accepted in the same way, so their enforceability is often misunderstood. For T&Cs to be legally binding, they must have already been accepted by the customer or client in the transaction, so it is recommended that your terms and conditions are signed by your clients, customers or suppliers before you begin your engagement. If it is the case the customer did not need to accept the T&Cs before entering the transaction, then they may not be bound by them.

What happens when a business does not have terms and conditions?

Without T&Cs, businesses will have to provide sufficient evidence to demonstrate that their terms of business have been legally incorporated in their contracts and dealings with clients, customers or suppliers. This can be difficult and expensive to prove.

Where a business does not have a written set of contractual terms, this may also appear less professional to prospective customers or clients.

Advantages of having terms and conditions:

Certainty

Written terms and conditions provide certainty and are much easier to enforce. It is also much easier to establish when there has been a breach of the terms. If you have a clear and robust set of T&Cs, this will lessen the scope for ambiguity and, naturally, lessens the likelihood of disputes arising. Preparing a standard set of terms from the outset will be much cheaper than being involved in a lengthy and costly litigation process.

Clarity  

Terms and conditions give clarity about what should happen in any given scenario. They clearly set out the key terms which govern the parties to the contract and help both parties understand their duties, rights, roles and responsibilities.

Confidence and consistency

Having a clear set of terms and conditions means businesses can maintain a consistent approach whilst also delivering good customer service. Having an agreed set of terms avoids ambiguity and helps manage client expectations about the goods/services businesses have agreed to provide. It will also give clients confidence in knowing what happens with regards to delivery and payment, so they know what rights they have in the event of late delivery, for example.  

Contact our corporate solicitors

We always recommend that businesses have a set of standard terms and conditions drafted, whether you are a new business or have been trading without formal terms and conditions and have had disputes with your clients, customers or suppliers.

Our corporate solicitors will work with you to fully understand the commercial needs of aims of your business and draft a robust and clear set of terms and conditions appropriate for your business.

With offices in London, Brighton, Eastbourne, Hastings, Uckfield and Ulverston, our solicitors work with businesses locally and nationally.