May 21, 2012

DO NOT do Business Without Terms and Conditions

Written by Peter Lynn

When starting a business, the legal basis on which you are willing to do business with your customers should be the first legal document in place.
We at Peter Lynn & Partners are specialist Commercial Lawyers and we have a wide experience of drafting robust standard Terms and Conditions of Business for each business sector tailor-made to each particular customer.
The following are some of the reasons why these are essential for all businesses:-
1.    Written terms help create certainty as to the agreement
Oral contracts are theoretically enforceable but the main problem with such contracts is evidence and certainty.
Some terms are forgotten and there is often a dispute as to what was actually said.
It is far easier to have a set of standard terms and conditions properly drafted to clearly set out the position on all important matters.
It saves thousands of pounds in fees if in a dispute of lawyers having to work out what the contractual position was rather than it being drafted in simple and legally binding language;
2.    Written terms and conditions help to minimize legal disputes and the chances of being taken to court
If you have clear terms for the provision of goods and services, the chance of a legal dispute is minimized as any person advising a customer would point out that there is little chance of winning if the matter went to the court.  Also you are in a strong position if taken to court or if there is a dispute.
3.    Written terms help to cover all the important matters
Most businesses probably cover matters such as price, payment terms and delivery costs but very few consider limiting their liabilities or covering aspects such as delay, protecting intellectual property rights risk and title issues, interest payments and a whole host of other matters that are normally considered in a well drafted set of terms and conditions.
4.    Written terms help to enforce agreement
Clear terms and conditions will set out clearly customer’s obligations and this makes it easier to see where they have been breached.  As such, written contracts are far easier to enforce if you need to take a customer to court i.e. for non-payment.
5.    Written terms help promote good customer service.
When your standard terms and conditions apply to all customers, this assists in providing good customer service.  Well drafted terms also include rights for customers to give them reassurance on such matters as complaints handling, refunds or insurance obligations.
6.    Terms and conditions help avoid and manage expectations.
Clearly spelt out terms and conditions avoid disgruntled customers who have overestimated expectations with regard to delivery times or any other aspect of the service.  In addition to the terms and conditions, detailed specification of services perhaps set out by way of a schedule useful.
7.    Written terms help businesses comply with the law.
Many industries have industry specific regulations and it is wise to ensure that terms and conditions clarify these and are up to date.  Certain information is required if carrying out e-commerce or other form of distance sales.
For further advice on Terms and Conditions of Business, please contact Peter Lynn on 01792 450010.