If you are selling goods or services to customers or as part of your business you are buying goods or services from a third party supplier or manufacturer so as to sell these on to your customers, then terms and conditions are important as a way of documenting what obligations are required from each party involved.
Sometimes they may not be a legal requirement, such as website terms and conditions, but they can provide protection against potential claims against your business.
What should company terms and conditions cover?
Terms and conditions should be drafted to represent how your business operates.
Critical elements which should be covered include:
- How is the contract formed – if this is not clear, you may find that the other party’s terms and conditions apply
- When will the goods be delivered and does ownership pass before they are paid for?
- When and how the goods or services will be paid for?
- What are the consequences of late or non-payment (for example, interest may be payable in addition to the price of the goods)?
- What quality standards the goods or services must meet and what warranties should apply?
- How and when the parties have a right to terminate the contract.
Terms and conditions – considerations for consumer customers
Recent legislation provides greater protection for consumer customers, who are usually purchasing goods or services with standard terms and conditions from a businesses and have no opportunity to negotiate the contract terms.
Certain information must be given by a business before the contract is entered into and if it is not, there can be serious consequences for the business. What information must be given depends on how the contract is made, i.e. if made face to face at the business’ premises (e.g. in a shop), made at a distance (e.g. online or telephone sales) or off-premises contracts (e.g. where a sales representative of the business meets with the customer but at premises which is not the business’ premises). Consumers must be notified of their rights including the right to cancel the contract and usually the right to a 14-day cooling-off period. If the customer cancels the contract, the legislations sets out timescales for refunds to be made and other obligations on the business.
Failure to comply with the legislation can have significant consequences for a business such as the customer having a year to change their mind and terminate the contract. Certain types of clauses are also unlikely to be enforceable against a consumer contract in the case of a dispute. The terms and conditions should therefore be drafted carefully to reflect the legislation if you supply goods or services to consumer customers.
Terms and conditions – considerations for business customers
Whilst terms and conditions in business to business relationships do not have to comply with the consumer protection legislation mentioned above, terms must still be considered fair by a court in the case of a dispute or they may not be enforceable. Careful thought must therefore still be given when drafting terms and conditions for use with business customers.
In business to business relationships, both parties will usually have their own standard terms and conditions which they would like to apply to the trading arrangement. You may require advice from us as to how best to try to ensure that it is your terms and conditions which get incorporated into the contract, so as to try to avoid a situation where a court may find that the other side’s terms and conditions were the last ones on the table and were the ones which were incorporated into the contract between you.
Why do you need website terms and conditions?
It is advisable to include rules for anyone who accesses your website. This is particularly important where users can interact with the site, upload content or write comments. An acceptable use policy is therefore advisable to set out what is considered appropriate behaviour by users in relation to the site. This should provide your business some protection if one user uploads inappropriate content or makes an offensive comment and another user takes offence and tries to make a claim against your business.
It is advisable to include disclaimers, for example as to errors in the website’s content or that you have no responsibility for or control over the content of any websites your site links to or comments or content uploaded by third parties.
The terms should also protect any intellectual property which you may have in the website.
How can our lawyers help with terms and conditions?
How long does it take to draft terms and conditions?