Why Having Terms & Conditions of Business Is Important to Your Business
Written by Leah Waller
Senior Employment Consultant Solicitor
Starting your own business can seem ideal…working for yourself, no one to answer to, your own hours, flexibility…the benefits seem endless!
HOWEVER, although we may be extremely skilled at our ‘job’ or ‘craft’, what does that actually teach us about running a business…going out on your own can seem like a great idea but can quickly become quite a scary (not to mention lonely!) place to be.
One document that is so easily overlooked is your Terms & Conditions of Business…these are SO IMPORTANT!
Terms & Conditions of Business are important because they govern your relationship with your clients and customers, and most importantly, how you get paid! These are needed long before you start taking on any employees or think about expanding.
So, what exactly should be included within your Terms & Conditions of Business? – I think it will become apparent, very quickly, why they are needed when you see what should be included.
Your Terms & Conditions of Business may differ slightly depending on where and how you work; do you always work from an office and conduct your contract with customers and clients in that office – not many small businesses do these days, especially during and following the pandemic. So, you know that this means that, where contracts are concluded away from the business premises, your client and customers have a 14-day cooling off period to cancel the contract right…and not pay, or to receive a full refund?
Don’t worry if you didn’t, you are not alone!
Although the Consumer Contracts Regulations 2013 state that a customer must pay for services provided up to cancellation (provided certain conditions are met) this obligation is not an implied term of the contract and so you should include an express contractual obligation to pay within your Terms & Conditions of Business.
Another way around this would be to include an Express Request Form within your Terms & Conditions of Business. This form is completed and signed by your customer requesting (and giving you permission) to start work straight away and in effect waiving their right to the 14-day cooling off period.
So, what else should we include (just in case that isn’t enough to get you thinking about getting yours in place, or ensuring your existing Terms have such protection for you!)?
As you would expect the Terms & Conditions of Business set out the details for you as the business; who you are, how to contact you and how their order/contract with you will be processed.
The Terms & Conditions of Business are also a good place to set out when you, as the Business, are able to make changes to Orders, Products and Services that you are offering as well as the customer’s rights, including the legal rights as well as any additional rights that you will accept and those that will only be acceptable at an additional cost.
Your Terms & Conditions of Business will set out the details in relation to delivery, if applicable to your business, and when ownership of the product passes to the customer and their responsibility and liability commences. Details should also be included about delays to delivery, when this is excusable and what you will and will not be liable for and how this will be remedied.
The Terms & Conditions of Business will set out when you can stop providing products or services to the customer, or suspend them, (think non-payment for example!) but there could be a number of reasons – legally, technically and specifically in relation to your industry.
The customer’s rights to end the contract will be included within the Terms & Conditions of Business, some of this is governed by the Consumer Contracts Regulations 2013 and so you must ensure that you are not diminishing any rights that the customer has but these should be set out and you may even go above and beyond this or give additional guarantees.
The Terms & Conditions of Business will also set out when the customer does not have any right to change their mind, and thus must still pay for their goods or services, as well as setting out the reasons in which you, as the Business, are able to cancel the contract and whether you are entitled to charge the full amount, part of the agreed sum or not at all. It is also important, within this section, to set out how a cancellation is completed and the process for this as well as details in relation to how and when any refunds (if applicable) will be made.
Dealing with complaints is an important and necessary part of any business and this procedure should also be set out within your Terms & Conditions of Business, or at the very least how complaints should be made and to who.
Then the part that is probably most important to any business…price and payment. This section will set out where the price is agreed, the VAT situation, what happens where there is a mistake in the price quoted and when, and how, the customer must pay. This section will also set out what happens if the customer does not pay, or pays late, and gives you the right to charge interest and/or fees on any late payments.
The Terms & Conditions of Business are important to include your liability and what you, as a Business, will be responsible for in fulfilling the contract and what you cannot be held liable for – think about those business losses and unforeseen losses that you do not want to be held liable for! There are, of course, losses that it would be unlawful to exclude – for example liability for death or personal injury caused by the negligence of the Business – but there are some losses that can be excluded and you are likely to want to do so and make sure this is clearly set out.
The Terms & Conditions of Business will also include information in relation to GDPR (yes, it hasn’t completely gone away!) and how you will use your customer’s personal data.
In addition to all of the above, your Terms & Conditions of Business will also include the ‘standard legal jargon’ that many people ignore but can actually be very important and you, as a Business, may well need to rely upon in the future, including…
- Your right to Assign the Contract
- Third Party Rights
- No Waiver Clause (meaning that if you do not enforce a clause of the Contract or Terms & Conditions of Business immediately, or at all, then you do not lose the right to do so in the future); and
- Governing Law and Jurisdiction of your Contract.
I appreciate this is a lot to think about but once you have your Terms & Conditions of Business set up, these can be used across the board, for all of your customers, and will only need to be reviewed in line with your own internal policies or as and when there are changes to legislation that may impact your Terms & Conditions of Business.
