David Hallett, solicitor at Buss Murton Law LLP comments: “In these again uncertain economic times, businesses are increasingly encountering difficulties with customers – usually over unpaid debts, which all too often leads to an argument over what was and wasn’t part of the contract between the two parties in the first place.”
“Whilst this may be good news for lawyers, these types of arguments are less good news for the parties themselves, with an inevitable drain on both time and money.”
Businesses can therefore try to protect themselves from such disputes by ensuring that they have a comprehensive and relevant set of terms and conditions along with, for example, an order form.
A good set of T&C’s should include the following details:
- What product or service will be supplied to the customer? This may be spelled out on an order form, particularly where each product is individual, or alternatively, where the product is standardised, then it can form part of the terms and conditions. The greater the detail, particularly where services are to be provided, the better. It is important to also consider stating what won’t be provided rather than simply what will be provided.
- Price. Again, will the price be detailed in the order form or the terms and conditions and will it include VAT? Will an allowance be made to adjust prices from time to time and if so, how will the customer be notified?
- Payment terms. When will payment be expected i.e. upon receipt of the order, upon delivery or after a certain number of days from the date of order? It is also sensible to consider what interest will be payable should the customer be late in making payment.
- What will the delivery terms be and who will pay for it?
- Limitation of liability. It is sensible to consider limiting your liability to a customer should the standard of the product fall below that which is reasonably expected. Any potential liability is commonly limited to the cost of the product. It is not possible to exclude liability for death or personal injury that is caused by negligence or fraud.
David Hallett continues: “Whilst the legal content of terms and conditions is undoubtedly important, it is also important to ensure that firstly the terms and conditions are presented to the customer in the correct manner. It is too late to introduce the terms and conditions once the contract has been substantially performed i.e. by attaching them to an invoice. Instead, the terms and conditions should be clearly presented to the customer at the outset of the relationship.”
“Finally, careful attention should be given to the drafting of the terms and conditions to ensure that they correctly represent the values and image of the business. A business that promotes the individual nature of its product will be doing itself an injustice if it then supplies customers with a 20 page off the shelf set of terms and conditions.”