There is a temptation when a set of terms and conditions are completed to take a contented sigh, pop them in a drawer, and then forget all about them. I know of a number of businesses who have spent the time and money required to produce high-quality terms and conditions, only to then never make any use of them. I won’t name any names!
The critical point about use of your terms and conditions is to ensure that they are effectively incorporated into the contract with your customer/supplier. This can be achieved in different ways:
- “Back of Order/Invoice Terms” – many businesses, particularly those selling regularly to the same customers, do not require a signed contract every time. Instead, they rely on terms being printed on documents used to form the contract, such as an order form or (in some cases) an invoice. This needs careful consideration – for example, if the terms & conditions are only included on an invoice, then it may be too late for them to be incorporated into the contract. The language of the order form and other documents should also be reviewed as part of the terms and conditions process – again, I have seen a number of occasions where “old” language remains on order forms, contradicting the terms and conditions.
- Contracts/Agreements – in other cases, the terms and conditions may be included in a more formal contract. This might be a one-off contract, particularly where it is a particularly high-value one. Alternatively, it might be a long-term supply agreement incorporating the terms & conditions, price list and specifications. It might sound obvious, but these documents ought to receive the same level of legal scrutiny as your terms & conditions – otherwise, they may undo some or all of the good work done previously;
- Putting them on your website – unfortunately, there is a perception in the modern world that putting your terms and conditions on your website is sufficient to incorporate them into any contract that you enter into. This is unlikely ever to be sufficient on its own – particularly if the transaction is not conducted via your website. If you intend to rely on incorporation of terms and conditions via your website, then at the very least clear language to this effect is needed in your order documentation, and the scenario as a whole would need careful review.
Whichever of the above methods you select, it needs to be effectively shared within your business. There is little merit in your senior management team being aware of new terms & conditions if no efforts have been made to feed the topic down to the people actually taking orders and dealing directly with customers. Those personnel also need to have an understanding of what to do if met with a negative reaction – such as a customer supplying their own terms and conditions in response.
I hope that these three articles have given you both an overview and some more specific examples of how and why terms and conditions can work for your business. I have a wide variety of experience drafting terms and conditions of all descriptions – from a sole trader providing advisory services, to a global engineering firm supplying equipment valued in 8 and 9 figures. Please give me a call or send me an email if you would like to discuss further how I can help your business to obtain the benefits of having high-quality terms and conditions.
Euan McLaughlin is part of the Commercial Department at Sills and Betteridge Solicitors. Euan joined Sills and Betteridge in 2009, qualifying as a solicitor in 2011. He is originally from Boston but is now based at the firm’s Lincoln office.