To T&C or not to T&C…that is the question ?
When people say the immortal words to me “do I need terms & conditions?”, after I’ve recovered from my initial shock, my reply is ……………………..
well, read on to find out.
Over the years Business owners have said various things to me on the topic of Terms & Conditions, such as:
“my customers are people that I know and have worked with for years, so I don’t need any contracts in place” or
“I’ve not had any problems getting paid in the past, so I don’t need any”
If only things were that simple for business owners. Nobody has a crystal ball and the ability to foresee what will happen in the future. Business relationships can unfortunately turn sour for various reasons. For example, client’s changing their mind on what goods or services they ordered, customers failing to make payments in time as they feel another company’s invoice is more important, or clients disputing the goods that are delivered and fitted, claiming it’s not what they wanted. The list could go on.
It’s the reality of modern day business, and the difference is that companies in 2019 know far more about their rights than they did in years gone by.
So, let’s delve a bit deeper and explore some of the many benefits of Terms & Conditions. From a legal perspective the benefits are huge:
- They provide certainty in terms of what you are offering;
- They help cashflow by setting out explicit payment terms;
- They specify the consequences of not paying on time and what the penalty can be;
- They can increase cashflow;
- They can help minimise disputes;
- If a dispute should happen to arise, they provide a basis to resolve them swiftly;
- They set out your client’s obligations and what you require from them in order to provide your service;
- They provide protection for you when handling client data;
- And last but not least, they form a legally binding contract between you and your client(s).
Again, I could go on, but these give you an indication of some of the many benefits.
Other business owners I speak to are in a different predicament, and one which they think is more beneficial. They already have Terms & Conditions in place, but they have used a template. Templates can be good but only when they are adapted properly. It is the substance that is added to the template that makes it binding, suitable for your specific requirements and legally binding. A template alone cannot be fit for purpose as, by its very nature, it is a generalised document that needs specific information adding to it.
Another scenario which is a bit similar to this, is when I’m advised by business owners that they ‘borrowed’ their Terms & Conditions from a friend. Now, this is all well and good if their friends’ business is in the same industry, providing exactly the same goods and services with the same payment terms etc. As this is very unlikely, the chances are the Terms & Conditions are not fit for purpose, and are therefore not binding.
If you have current Terms & Conditions it is important to keep them up to date to ensure that they cover the Goods and Services you supply, your payment terms and to keep termination clauses up to date with how your company operates. To accompany this, it is essential that any laws and regulations which need to be stated within the Terms & Conditions are accurate and legal. One of the first things I look at when asked to review current Terms & Conditions, is to see how up to date the document is, and I can generally spot this instantly when looking to see if there is a GDPR clause included. If this is not included, then they are at least 1 ½ years out of date and this aspect alone needs updating.
So, in answer to the question at the outset, the answer is a resounding YES!
If you are a company that provides Goods and/or Services, you need Terms and Conditions, and I would always recommend a bespoke set which specifically meet the needs and requirements of your company. That way you can be sure that they are legally binding and will work for your company. To ensure that these are drafted correctly, I would recommend that you seek advice and assistance from a professional who specialises in contracts, such as a Solicitor, as they will have the benefit of the knowledge to draft the document correctly for you.
Thanks to Michael Long at MJL Law for this straightforward and straight talking guide to T&C’s!