How to get the right terms and conditions for your business

Why terms and conditions are so important for start ups and sme businesses

Terms and Conditions (T&C’s) are a vital way for all businesses and not least small businesses to set out clearly legal rights and obligations of both parties in a contractual relationship.

Whilst there is no guarantee that any business can avoid legal disputes, if you do not have any or the right terms and conditions, the chances of very damaging contractual disputes significantly increase. This is especially the case for start ups, small businesses and growth businesses.

What Should Be Included in Your Terms and Conditions?

While specific content will vary based on the nature of your business, here are some essential elements to consider:

• Definitions - clearly defining key terms used in the agreement.

• Services provided - a detailed description of the services or products offered.

• Payment terms - payment schedules, methods of payment, and late payment fees.

• Limiting liability - setting limits on the business's liability for potential damages or losses.

• Intellectual property rights - ownership of intellectual property created as part of the agreement.

• Confidentiality - obligations to maintain confidentiality of sensitive information.

• Limitation of liability - limiting the business's liability for damages or losses.

• Indemnification - provisions for indemnifying the business against claims or losses.

• Termination - conditions for terminating the agreement.

• Dispute resolution - procedures for resolving disputes, such as mediation or arbitration.

• Governing law and jurisdiction - especially important when dealing with oversees customers or suppliers.

• Force Majeure - what will happen if there are events beyond the control of either party.

• Notices - how and where notices should be sent.

• Entire Agreement - a clause stating that the T&Cs constitute the entire agreement between the parties.

Common pitfalls

• Implied terms – there can be a tendency to think that once you have your terms and conditions, as long as you stick rigidly to them, you are protected. However, terms can be implied into a contract by conduct, statute or the courts. These can create unexpected obligations for your business.

• Consumer contracts – to protect consumers, regardless of what a business may include into terms of business with consumers, terms can be set aside if they are considered unfair under the Unfair Contract Terms Act and/or the Consumer Rights Act or other consumer protection laws.

• Several sets of terms and conditions circulating – it is very common in a business to business context and especially when dealing with established and/or sizeable counterparties, for both seller/supplier and buyer/client to have their own set of terms and conditions. If both sides send theirs to each other, which apply legally? This is known in legal terms as a “battle of forms”.

• Waiver - If you fail to enforce a term of your contract, you may be deemed to have waived your right to do so in the future.

• Not enough clarity on termination rights –your agreement should make clear what types of breaches give the innocent party the right to terminate the contract.

• Consistency - your T&C’s should be consistent with other contracts and policies within your business.

• Regular review - review and update your T&Cs to reflect changes in law and business practices.

How we can help

Our experienced lawyers can help you draft comprehensive Terms and Conditions that:

• Are legally sound and enforceable.

• Are clear and easy to understand – not just for your customers or suppliers, but also for you and your staff, which is vitally important.

• Protect your business interests.

• Comply with relevant laws and regulations.

We can also advise on how to incorporate your T&Cs into your website, contracts, and other business documents.