With any new business there are a number of matters that the owners need to consider carefully, whether that be finding premises and suppliers or generating new customers, but perhaps most important for any new or existing business is to ensure that its standard Terms and Conditions of business (the contractual basis on which it trades) are:

• properly drafted for the specific needs of the business; and
• as importantly, ensuring that they are incorporated into agreements with clients and customers so as to be legally binding and enforceable.

However, businesses often give their Terms and Conditions low priority until a dispute arises, by which time it may be too late and significant costs may be incurred as a result. It is not uncommon for a business to issue quotations or accept orders in respect of its goods or services using either terms that are:

• out of date in terms of developments in legislation;
• entirely inappropriate for that type of business;
• copied from various competitors to create a hybrid version; or
• those of its customer because the customer has successfully introduced and / or substituted their own Terms and Conditions.

By obtaining help from our specialist commercial lawyers at QualitySolicitors Oliver & Co. you can ensure that your business does not find itself in this predicament and at a significant disadvantage in its contractual dealings.

Incorporation of Terms & Conditions

No matter how well your Terms and Conditions are drafted, they will be of no use unless proper procedures are followed to ensure they are incorporated and prevail over any competing Terms and Conditions. Common problems include:

the design of any relevant forms – sales quotations, order confirmations, etc;
the introduction of the Terms and Conditions at too late a stage in the process – once a legally binding contract has been entered into.

Your Terms and Conditions will not bind your customers unless they have been incorporated into your contract with them and to ensure that that is the case, you must provide your customers with a copy of your Terms and Conditions prior to any formal agreement being reached.

Providing your Terms and Conditions after an order has already been placed by the customer and accepted by you will not be sufficient. It is not unusual to come across the situation where a seller has sought to impose its Terms and Conditions on customers by printing them on the back of its invoices. This will not be sufficient to incorporate those Terms and Conditions into any contract, as invoices are traditionally raised and despatched well after a legally binding agreement has been formed.

Problems arising if your Terms and Conditions are not incorporated

While there may be no doubt that a contract does exist between you and a customer, should a dispute arise as to the Terms of the agreement, a Court will be asked to consider whether a transaction was conducted on your Terms and Conditions.

If not and if the customer has not introduced Terms and Conditions of its own when placing the order, then the Court will imply Terms into the agreement on the basis of an inference that the parties must have intended such Terms to be incorporated.

Any such implied Terms may not be to your advantage and such a position should be avoided. You are able to put far more detailed provisions for the benefit and protection of your business into your Terms and Conditions than a Court would ever imply.

Practical tips to make sure you do business on your terms

• Ensure your Terms and Conditions are brought to your customer’s attention at the earliest opportunity;
• Consider setting out your Terms and Conditions in any brochures, catalogues or other marketing material aswell as on your quotation forms and on your order confirmations and make reference to them;
• Do put your Terms and Conditions on your invoices, but not only there – if there is a course of dealing, this will assist the argument that your Terms and Conditions have been brought to your customer’s attention over time;
• Train your staff in your procedures to ensure they have at least a basic working knowledge of the rules of how and when a contract is formed.
• Make sure you get your Terms and Conditions in front of the customer first and last! 

Key areas to address in your Terms and Conditions

The guidance provided above relates to the procedural aspects of protecting your business in its contractual dealings. Our specialist commercial lawyers are also available to provide advice and assistance on the Terms and Conditions themselves to ensure that in the context of your business you minimise the risks.

Issues such as:

• Calculation of price and payment terms;
• Liability for taxes and ancillary costs;
• Interest on late payment;
• Exclusion / limitation of liability to customers and third parties;
• Different approach when contracting with consumers rather than businesses;
• Retention of title to goods in the event of non-payment
   

All require very careful drafting to ensure that your business is protected to the maximum amount permitted by the law.

For further details on our fixed fee review and redrafting service please contact either Tim Polding or John Loney.