Do your Terms and Conditions leave your business at risk?

Anna Sivula, Solicitor in AMD’s Commercial team, explains why tailoring terms and conditions to suit your business pays off in the long run.

 

For many startups budgets can be limited and it may be tempting to simply copy T&Cs from another business. However, using T&Cs that belong to someone else can have a whole host of unintended consequences, and I always recommend businesses to seek advice from a commercial solicitor, even if it is only to review the T&Cs before they are put to use.  

 

It is not only embarrassing if a customer notices that your T&Cs refer to an entirely different business – you may recall the recent press coverage regarding a ferry company’s T&Cs which referred to pizza deliveries! – but it can also leave your business exposed to substantial risk. I have outlined some key areas to look out for below.

 

Do you provide products or services?

Although most T&Cs may look very similar at first glance, there are crucial differences depending on what a particular business does. Different rules and considerations apply depending on whether you sell products or provide services and whether you do this in a brick-and-mortar store or online.

 

Who do you sell to?

T&Cs are governed by different rules depending on whether your customers are private individuals or other businesses. Copying T&Cs that belong to someone else without understanding what rules apply to your business may mean that you will not be able to rely on your T&Cs when you most need to as they may not be enforceable.

 

What are your payment terms?

Payment terms are probably the most important term in your T&Cs as it determines how and when you will be paid and what rights you have if your customer does not pay on time. Your T&Cs should set out clearly your charges, deposits (if any), timescales for payment or subscription terms and your rights to charge interest on late payments.

 

Can you limit your liability?

All contracts carry some risk of liability, for example, if a product is faulty or your customer is dissatisfied with your services, or if you fail to deliver on time. Well drafted T&Cs can help manage these risks by limiting the amount of compensation your customer can recover from you. Your ability to limit liability will depend on what your business does and who your customers are, however, and your business may be left exposed if your T&Cs are not drafted carefully to reflect your circumstances.

 

If you require any assistance or advice regarding terms and conditions or other commercial contracts, please do not hesitate to contact our experienced team of Commercial solicitors by telephone 0117 973 3989 or email annasivula@amdsolicitors.com.


This article is provided for general information purposes only and represents our understanding of the relevant law and practice as at the date of uploading. This article should not be relied upon as legal advice pertaining to any specific factual situation. Legal decisions should be made only after proper consultation with a legal professional of your choosing.


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Anna Sivula

Solicitor


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