Every business, whether a large multinational or a tiny company, should have a set of standard business terms or conditions. This sets out the contract terms between the business and its customers and is designed to both limit liabilities and protect your rights.
Whether the economy is strong, or in the doldrums, any well run business needs to ensure that they are getting paid on time.
Cash is king and to get your money in your bank account at the earliest opportunity, you need really clear terms and conditions.
For specialist advice about getting the right T & Cs, just call us now on FREEPHONE 0800 1404544 or Salisbury (01722) 422300.
Does a contract have to be in writing?
Often, a business supplies services and goods based on verbal or informal agreements. And contracts made verbally can still be binding – a contract does not have to be in writing. Oral contracts can be very risky – especially large sums are involved. If all terms are clearly set down in writing however, there is far less chance of a dispute arising.
Our commercial law team can help you both with drawing up brand-new terms and conditions – or reviewing – and if necessary, amending any existing T and Cs for small and medium-sized businesses throughout Wiltshire, Hampshire and Dorset from our offices in Salisbury, Andover and Fordingbridge.
You may be surprised by how little it costs for an experienced business solicitor to draft tight terms and conditions for you.
What should my terms and conditions include?
Standard terms and conditions usually include:
· Delivery arrangements
· Terms of payment
· Details of what services or goods will be provided
· Credit periods and credit terms
· Data protection clauses
· Details of interest charged on any late payments – Click here to find out more about how to charge interest on late bills
6 Reasons to Review Your Terms and Conditions
Here are some issues you and your solicitor may want to consider:
1. Make sure that it is your terms and conditions that govern the performance of the contract – not those of your client or customer.
2. Make clear when payment for goods or services is required – this is well worth checking. You may find your current payment terms are far too generous. It’s not uncommon for businesses to state payment is due 30 days after the end of the calendar month when the invoice was sent – that could mean a delay of up to two months before you can even chase for your own money. Reducing your credit period to perhaps just 14 days from the date of invoice could make a huge difference to your cash flow.
3. Don’t forget that you have a legal right to charge interest on unpaid bills – it’s always good, however, to include details of such interest charges in your terms and conditions.
Click here to find out more about how to charge interest on unpaid bills
4. Don’t rely on a verbal contract – it might prove binding. Be aware that verbal contract agreements are enforceable in certain circumstances. You will be much better off if you make sure that your written terms govern any agreement.
5. Check that your terms and conditions are both clear and easy to understand. Whilst you may be able to rely on your terms and conditions in any court case, the value of a transaction may mean it is simply not worth taking legal proceedings – and the whole point of clear terms and conditions is to avoid problems arising in the first place.
6. Ensure that your client or customer is aware of your terms and conditions. There is little point in hiding your terms and conditions away where they will never be read. Making sure your clients or customers are fully aware of your terms and conditions will significantly reduce the risk of any subsequent disagreement between you.
Making sure that you have the right terms and conditions for your business is a critical element in success.
If you haven’t got these six points covered and are looking for an experienced commercial solicitor with plenty of experience of writing bespoke terms and conditions, make sure that you call one of our experienced business team.
Doing without Written Terms and Conditions – the Risks
Starting a new business is often very exciting and making sure you have your own terms and conditions drafted can be overlooked. But doing so can have a disastrous effect on your business.
What do you risk? Fundamentally, if there is no clear agreement with you and any supplier or customer then is huge scope for misunderstanding. You need to cover your back with the right terms and conditions .
What’s more, the doing without T and Cs can create havoc with two simple but critical financial issues – cash flow problems through late payments and wasting money on the necessary debt collection.
Get your terms and conditions right and make sure there’s no place for slow payments from your customers.
DIY terms and conditions
It’s amazing how many otherwise well-run businesses try to cut corners by simply copying or, worse still, cobbling together their terms and conditions from documents used by other businesses, or cribbed from the Internet.
It’s a totally unnecessary risk. Properly drafted terms and conditions is the bedrock of any successful business.
Don’t take chances by relying on DIY terms and conditions. Get them drafted, or reviewed, by a specialist business law solicitor.
Should we review our existing terms and conditions?
If you drafted your T and Cs yourself, then the answer is definitely yes – get them reviewed by a specialist solicitor.
However even if your original terms and conditions were drafted by a solicitor, you may find that your business, or the market your trading in, has changed and that the terms and conditions that were perfectly suitable when they were drafted, are no longer adequate. If that’s the case – then make sure you get your terms and conditions reviewed as soon as possible.
At Bonallack and Bishop, we are happy to help you draw up terms and conditions for your business to protect your interests.