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What are terms & conditions (T&C), and why should your business have them?

In short, terms and conditions agreement (T&C) set out the rights and responsibilities of the provider of a service and the beneficiary/user of that service. It effectively forms a legally binding contract between both parties and will often include details such as an explanation and definition of key terms, the legal limitations, duties, rights and responsibilities of all parties.

Standard terms and conditions agreements are often favoured by many new businesses – it does not involve instructing lawyers and is a quicker process, but do they cover you and your business needs adequately?

The answer to that question will often lie in the services you are providing, and who the services are being provided to. For example, a business supplying goods will require vastly different terms and conditions to those supplying services; businesses dealing directly with consumers will require different terms and conditions to those dealing with other businesses; and organisations working in the world of software or technological products will require different conditions entirely.

That being said, while all terms and conditions agreements vary, there are key pillars that should remain regardless of the services being provided.

For example, limitation of liability will be applicable to almost all businesses. As a provider of goods or services, it is vital that your terms and conditions stipulate clear and unequivocal limits and exclusions of liability. This will provide you with legal protection from being over-exposed for any breaches which occur, and clear limitations on the types of losses will ensure there is no ambiguity as to how you may be liable. It is worth bearing in mind that while limitation of liability is vital, it is not unlimited in scope and there are a number of areas where liability cannot be limited or capped, particularly when dealing with consumers.

The intended term of an agreement should also clearly be set out in any terms and conditions. If the agreement is for a fixed term only, the agreement must stipulate this. Similarly, it is often the case that the right to terminate an agreement is reserved in the event of a material breach, repeated breaches and acts of insolvency. If this is the case, the agreement should set this out clearly ensuring it is easily understood by all parties.

It may seem obvious but spelling out the basics such as the price of goods and payment schedules will save a lot of time and grief should disputes ever arise. As well as setting the price and payment periods, terms and conditions should specify what happens in the event of a late payment. Is interest to be added? What rate should it be added at? Could the agreement be terminated in totality? If you are unsure of the answer to any of these, your terms and conditions are not clear enough.

Finally, in today’s digital age, data protection and GDPR compliance must be spelled out as part of a terms and conditions agreement. By doing so, both parties will be agreeing what data will pass between them and the protocols for ensuring the protection of that data for the purposes of GDPR compliance.

Far from an exhaustive list, the advice above accounts for the minimum that should be included. The exact terms and conditions required will be dependant on a number of factors and a solicitor is best placed to advise on these matters after thorough consideration and discussion.

If you are reading this and wondering whether your terms and conditions need to be refreshed or redefined, please call 01283 526200.

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