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Why terms and conditions should reflect your Company’s Business

Business terms and conditions are a vital framework setting out how commercial transactions will take place and what is expected of each party.

They contain the detailed terms that will accompany a contract, providing the signatories with the rules that will govern their commercial relationship.

The importance of the right terms and conditions

Carefully drafted terms and conditions that are tailored to a specific business can be the difference between success and failure if a dispute arises.

The document should cover all eventualities, including how a service or product will be delivered, how and when payments will be made, options for action to be taken in the event of non-payment and cancellation methods. There is also the option to limit liability as far as legally possible.

By setting out a framework for transactions, all parties involved will understand from the start what is expected of them. If the terms and conditions are tailored to suit a particular business, it will go a long way to preventing disputes.

If a disagreement does arise and legal action is necessary, clear and robust terms and conditions which form part of the contract will make it easier for the court to come to a quick and satisfactory decision.

Terms and conditions on a website

If a business includes a website that provides goods, advice or recommendations then it is always advisable to draw up a comprehensive set of terms and conditions, even though this is not a legal requirement. They should not be copied from elsewhere. Not only does copying terms mean that they are not tailored to your business, it is also a breach of copyright and they may one day be in front of a judge in a court of law.

Should a dispute arise, you will be secure in the knowledge that your terms and conditions, drafted for your particular business needs, will shape the way the dispute proceeds. In the event that matters proceed to court, you will be able to have confidence in them and their ability to protect your interests.

What should be included in terms and conditions?

While every set of terms and conditions will be different and should be drafted to suit the business they are intended for, there are several clauses that are likely to be included:

  • Payment details, such as when a payment becomes due and what penalties will be imposed for late payment.
  • Delivery terms, such as when and where goods are to be delivered
  • Limiting of liability. This is useful for website content, where liability for content in website links or errors in website content can be excluded.
  • A complaints procedure.
  • A returns and refunds policy in respect of retail.
  • A note of which laws apply to the transaction, for example, the laws of England.
  • A confidentiality clause.

The terms and conditions must be available for review by clients or customers and it must be made clear that they have to be accepted by the user before the transaction can proceed. In respect of a website or online transaction, this should be done by way of a clickwrap, not a browsewrap – the user must actually have to click an ‘Accept Terms and Conditions’ button before they can proceed.

Updating terms and conditions

As a business grows, legislation changes and markets evolve, terms and conditions should be reviewed and updated to reflect this. It is a job that is all too easily postponed, but is essential to protect your business from the damage and disruption that can result from disputes or legal action. Existing clients or customers must be notified of any change, be able to view the new document and then actively agree to it.

Ideally, terms and conditions are always bespoke and drafted professionally. This ensures that they will cover situations specific to the individual business which they are designed to protect. Robust terms and conditions will not only make it difficult for someone to challenge them but will often prevent lengthy and expensive litigation.

If your business needs new terms and conditions or you would like your existing document reviewed to ensure it is effective, speak to Andrew Hayward or one of our expert commercial solicitors on 01753 876800 or email  Andrew.hayward@owenwhite.com  or law@owenwhite.com

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