Mind Your Terms and Conditions
Terms and Conditions are not concepts that set off a flurry of excitement in the hearts of business owners. When it comes to ensuring you can control your business, reduce your risks and protect your interests, having terms and conditions in place is something of a no-brainer.
Forget Your ‘Ps & Qs’, Mind Your ‘Ts & Cs’
For those in the STEM sector, having a robust set of terms and conditions provides key advantages including:
- Greater opportunities – terms and conditions allow organisations to enter into more agreements more quickly, because they do not have to painstakingly negotiate every contract individually. In addition, terms and conditions provide consistency and rights for consumers of your product or service. Your customers or clients know what to expect, which helps you to provide high quality customer service whilst managing their expectations.
- Reduced risk – not having terms and conditions leaves you exposed to contractual disputes which can rob you of time and money at a rate a thief could only dream of. By getting clients or customers to agree to the terms on which you trade in advance, if they raise an issue, you have a signed document to point them to, explaining the terms of your delivery, standards of service and payment terms.
- Greater control over your business – if you do not set out the terms and conditions under which you will trade, your clients/customers will do so for you. For example, many large corporations pay invoices within 60, sometime even 90 days of receiving them. This can be disastrous for a small to medium technology or science company’s cash-flow. However, you can state in your terms and conditions that you require payment within 30 days of a client receiving an invoice. If you are uncertain about whose terms and conditions will prevail, you can discover the answer here.
What should my SME’s terms and conditions contain?
There are no rules as to how terms and conditions should be laid out and every company has its own unique requirements. To provide you with adequate advantages and to protect you against the risk of legal action, you should include:
- The nature of your business and the type of products and/or services you sell
- How a client or customer can make an order
- The basis of a sale
- When and how delivery of a product or service will be made
- Payment terms
- How payment can be made
- How and when a customer or client can cancel an order
- When the ownership of goods such as software is passed onto a customer
- Confidentiality terms
- Warranties and indemnities
- Dispute resolution processes
One thing you must never forget is to limit your liability! Setting an appropriate level and making sure that your limitation is ‘reasonable’ to the courts if it’s ever disputed is something you’ll need to obtain professional advice on.
What if my clients/customers do not like my terms and conditions?
If your terms and conditions have been professionally drafted, the chances of them being disputed are low. This is because a person who drafts terms and conditions for a living will have taken the time to build an understanding of your business, and of your clients/customers, whether they be the general public or other businesses. By investing in professional advice and drafting, your terms and conditions are less likely to be disputed by a new client/customer.
If objections do arise, remember, you are free to negotiate. For example, you may have an administrative penalty attached to your terms regarding late payment of invoices. Few large organisations will accept such a term, as they often have a policy of paying invoices as late as possible to protect their own cashflow.
Aren’t bespoke terms and conditions expensive?
Instructing a professional to draft tailored terms and conditions is an investment. However, like everything, it is not about how much something costs, it is about the value you receive. Most people who start their own business are attracted to the idea of being autonomous; making their own decisions and building an organisation based on values important to them. Failing to put terms and conditions in place or buying a generic set online for a small sum leaves you vulnerable to legal disputes and means your terms of trade will be dictated by the other party.
I get paid upfront, so I do not need Terms and Conditions
Even if you are paid in advance, you are still vulnerable to legal disputes, especially if you are challenged on the quality of the service you have provided or the length of time you took to perform it. STEM companies and other businesses that create or use intellectual property need to ensure that it is not inadvertently given away or exploited in a manner that will damage their interests.
Having your own Ts and Cs drafted may initially seem like an expense you can do without. However, a small investment in time and money now can save you thousands of pounds, not to mention lost productivity, should you become subject to a legal dispute all because you failed to have terms and conditions in place.
Technical Terms provides in-depth legal advice on commercial law matters and drafts bespoke terms and conditions. If you require assistance, please contact us on 01904 899794.