Creating Terms & Conditions is usually fairly low on the list of priorities for anybody setting up or running a business. They are often an afterthought, or at best something that is churned out as a box-ticking exercise.
Only when something goes wrong, e.g. a customer complaint or a late payment, do you turn to the Terms & Conditions (T&Cs) hoping to find something nestled in the small print to protect yourself or fall back on. And it’s rarely there, but it should have been. If only you had spent more time in the first place, or even taken time to review and update as your business evolved and changed.
At Else Solicitors, we have worked with hundreds of clients and help them implement the correct T&Cs for their business. And we also offer a free review service for businesses that have T&Cs in place but haven’t appraised them for a while, or want to check against recent changes in legislation. Please contact Adam Gilbert for more information on this service at adam.gilbert@elselaw.co.uk or 01283 526 229.
In almost all cases we find something that is either incorrect, needs updating or leaves the business in an exposed position. We have therefore compiled our list of the ‘Top 10 Tips’ that businesses should consider in relation to their T&C’s:
- Don’t copy and paste. Ah, the wonders of the Internet. We have all thought about it; “just have a look at a competitor website, copy their T&Cs, change the names and tweak a little, and hey presto…” Not surprisingly the reasons for not taking this approach are numerous (starting with the fact that it’s copyright infringement!). No two businesses are exactly the same, so it is important is to ensure the terms are tailored specifically to how your business actually operates and the practices that occur day-to-day (both in a legal and commercial perspective).
- Review regularly. Businesses rarely review their T&Cs. They naively assume that nothing will change and they are unlikely to ever need to refer back to them. Unfortunately legislation is changing all the time, and it is important that businesses have a plan in place to review their T&Cs on a regular basis, and seek professional advice to ensure they remain up to date. We offer a free review service for businesses that want to check their T&Cs are up to date. Please contact Adam Gilbert for more information on this service at gilbert@elselaw.co.uk or 01283 526 229.
- Keep up with your business. As businesses evolve then their T&Cs need to evolve too. One common mistake we see is when a business starts selling products or services online, but they fail to address this new channel in their T&Cs (the legislation for selling online can be very different to other sales and distribution channels). The same logic applies to products, services or channels that the business stops using. Clauses that no longer apply to your business practice should be removed along with all cross-references.
- Include all Processes. The T&Cs aren’t just a legal document, they often explain to a customer or supplier your processes. Practical processes for the company are the key elements that your business will rely upon during normal trading. But often they are not fully covered, which rather defeats the whole object of the T&Cs in the first place. Examples include:
- How payment is made, timings and methods of payment (including those the company do not accept),
- Refund policy, timing and procedure,
- Obligations on both of the parties;
- Processes by which the customers can cancel goods, services or a subscription. How they can make a complaint, and how disputes are settled,
- Informs customers on their right to make a claim, i.e. warranty, goodwill or guarantee claims
- Ensure late payment provisions. We all like to assume that debtors will pay on time, but this rarely happens with every debtor. If no late payment provisions are included in the T&Cs, or the payment mechanisms are poorly structured, then you are exposing your business to the potential of bad debts and possibly no recovery at all.
- Include a cap on liability. Any claim could become a huge liability to a business, and hence the liability that you are prepared to accept needs to be included and clarified in your T&Cs. If there isn’t a cap it potentially could result in an uncapped liability.
- Detail when risk and title passes to the customer. Often referred to as a “retention of title” clause, this type of clause sets out when title or ownership of the goods passes to the customer. It also sets out when the customer becomes responsible for them. Without this clause, you will have no right to reclaim or repossess unpaid goods. In addition, if you don’t set out when a customer takes responsibility for the goods, if there is a problem such as the goods are damaged or stolen, it will not be clear who is responsible for paying for the loss or damage to those goods and ultimately a dispute will arise.
- Delivery. Linked very much to the above tip on reviewing T&Cs on a regular basis, often delivery details are missing or not up to date. Increasingly, we are seeing instances of where charges for delivery are missing. This leads to disgruntled customers who feel mislead when they face an increase in the cost they believed they were paying due to delivery charges. Even if the precise charges can’t be given, mention should at least be made to the fact that delivery costs are extra, not included in the price and may be subject to quote or estimate based on the customers location.
- Document Data Protection. This includes how data is being collected, processed and stored by your business. The legislation has recently changed and hence all processes and references to the old Data Protection Act 1998 need to be updated and replaced with the Data Protection Act 2018. In addition, you will need to put in place contractual provisions between the “controller” of the data and the “processor” of the personal data. This is now a requirement of the new law.
- Include boilerplate clauses. These are often absent because “they make the document lengthy and look unimportant”. However, these clauses are there to protect the business, and include:
- The right to vary the terms and conditions;
- What is the governing law and jurisdiction for the contract – particular important when dealing with customers or suppliers from overseas;
- Severability of a clause – the ability to remove clauses that are found to be void or illegal;
- Rights of Third Parties
- Right to transfer obligations and rights relating to any waiver of rights
- Third party claims and Alternate Dispute Resolution process.
- Ensuring that the agreement does not amount to a partnership within the meaning of the Partnership Act;
- Entire Agreement – in other words, anything said in negotiation cannot be used; and
- Force Majeure – how events beyond the control of the parties are dealt with and handled.
If you have any questions, or would like us to have a look at your current Terms & Conditions, then please contact Adam Gilbert, Head of Corporate & Commercial at Else Solicitors via email or phone on adam.gilbert@elselaw.co.uk or 01283 526 229.