Running a small business isn’t easy; whether you’re just starting out and striving to get your business known, or you’re building upon years of trading, there’s always a lot to be done. As such, it’s understandable if sorting out your business’s terms and conditions is not your top priority. Maybe you have yet to implement any formal terms and conditions, thinking you’ll ‘get round to it at some point’? Or maybe you found some ‘all-purpose’ terms and conditions years ago and have just left them to tick over in the background?
Whatever your situation, the simple fact is: terms and conditions matter. If your business does not have well-drafted terms and conditions, appropriate to its specific needs, you are putting the very business you have worked so hard for at risk.
Protecting your Business with Terms and Conditions
There are many ways in which terms and conditions can protect your business. Here are some of the most important:
Suppose a customer is late in paying for your goods or services, or they have not done something you thought they had agreed to; without terms and conditions to demonstrate a failure to uphold the agreement, it can be difficult to obtain legal redress. It could only be your word against theirs that a late payment has even occurred; they might believe that payment was to take place at a different time.
It is easy to imagine how such a situation could cause significant cash-flow problems for a small business.
Good terms and conditions will set out the various rights and duties of your business and its customers. With comprehensive terms and conditions demonstrating what has been agreed, your business will have vital evidence to support legal actions for debt recovery or to seek recompense for other breaches of the agreement.
All kinds of legal disputes can arise in business, but the best method for avoiding negative consequences is to prevent the dispute from occurring in the first place. When the nature of the business relationship between two parties is set out clearly, there is significantly less chance of misunderstandings on either side. Effective terms and conditions provide certainty and act as a point of reference to demonstrate exactly what was agreed at the outset.
Well-drafted terms and conditions can set out many aspects of an agreement. These include:
– The goods or services being provided
– The terms of payment, such as when this should take place, how much, the consequences for late payment, and whether interest will be charged
– What happens in the event of failure to deliver goods or services
– Any guarantees or warranties
– The timescales for delivery or for communicating any dissatisfaction
– The length of time the agreement operates and any notice period required to end it
– What law should govern the terms and conditions (if dealing with customers in different countries)
Imparting required information
Terms and conditions also allow you to provide a standard body of information at the beginning of every business arrangement. Depending on the nature of your business, you might be required by law to provide certain information to your customers. If you are discussing business arrangements with customers on an ad hoc basis (and operating without adequate terms and conditions) some of this information may be overlooked. Including required information in your terms and conditions is a good way of ensuring that these details are always communicated to every new customer.
Similarly, if you employ staff in your business, terms and conditions can give you peace of mind. All required information will be consistently passed to the customer through the terms and conditions.
Terms and conditions can also help staff recognise exactly how your business deals with its customers and can offer them a framework for their own customer interactions.
Making Effective Terms and Conditions
A survey in 2014 found that only 27% of the 2000 people questioned actually read any terms and conditions they received. This does not diminish the importance of terms and conditions, but it does highlight two important features of effective terms and conditions:
- They should be provided in a form the customer can easily understand. As mentioned above, terms and conditions are vital for creating certainty as to the business arrangement agreed so, if their meaning is unclear, misunderstandings could still arise. Professionally drafted terms and conditions can ensure that they are comprehensive, understandable and open to only one interpretation.
- A system should be in place for the customer to acknowledge receipt and confirm acceptance of the terms and conditions. This serves to provide an even greater level of protection from legal disputes as you will be able to clearly demonstrate that your terms and conditions were agreed upon by the customer.
It is also crucial for your terms and conditions to be appropriate to your business. If you use terms and conditions from a similar business, or ‘all-purpose’ terms and conditions, you may not be fully aware of what they do or do not cover. They may not apply to your own business exactly as you intend. The most reliable way to avoid this is to have terms and conditions drafted specifically for your business.
Additionally, once your terms and conditions are established, you shouldn’t just forget about them. Review them periodically to ensure they are still effective for your business as it currently operates. If you change any of your preferred business practises, consider whether your terms and conditions also need to be amended; obsolete terms and conditions may be just as unsuitable as those covering a completely different business.
Peace of Mind for your Customers
Both your business and your customers would receive rights under a set of terms and conditions. The statistics mentioned above suggest only a few customers will usually read them, but the very existence of your terms and conditions alone can give people more confidence in their transactions with your business. It presents an honest and professional image and the small minority who read the terms and conditions in detail can gain awareness of any systems in place to protect their interests – such as complaints procedures, for example.
How Truth Legal can help
If you need terms and conditions written, modified, or updated, please feel free to get in touch with us and tell us about your situation. We can suggest terms and conditions which might suit your business needs, but it is always worth considering the arrangement you wish to offer your customers, as well as how you would like them to behave in relation to your business.
Whilst our head office is in Harrogate, Truth Legal also has virtual offices in Manchester and London. We are more than willing to sit down with you for a free, no-obligation consultation and to discuss any ways in which we can help you.
You can get in touch either by telephone on 01423 788 538 or by emailing us at [email protected]