How to develop your terms and conditions

Terms and conditions (also known as terms of trade), whether they apply to sales or services, are essential to your business as they set out the level of responsibilities that apply to you and your customers.

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They represent you either as a seller or a buyer and protect your rights. They can also inspire confidence in your business, especially if your business is run online.

“They are absolutely vital. They are the terms on which you trade and without them, how do you seek redress for anything that goes wrong?” says Nigel Lander, an adviser for Business Link.

Where to go

Terms and conditions are contained within a legal document, but you can buy standard templates and adapt them to your particular needs. Small businesses can get an electronic, general set of terms and conditions from online companies such as Clickdocs, Legal Pulse and Easyform .

If your needs are more specialised, it could be worth seeking the services of a commercial lawyer – this will work out more expensive but may save you more money and problems in the long term.

What you should include

There is no hard and fast rule as to what to include in terms and conditions, but they should generally cover the following:

  • when payment should be made
  • any interest that will be due on payments not made by the specified time
  • who owns the products or services before any payment is made
  • who is responsible for the goods or services
  • space for the customer to sign and acknowledge his agreement

“In the event of a dispute, the terms will be what infoms the decision. It will define the contract, delivery, legal liability and indemnities,” adds Lander.

Terms and conditions should also be set out in an easy-to-read and easy-to-understand format. If your business is online, it is essential that you have a list of terms and conditions on the site, and that they are clearly visible, either on the home page, or accessed via a clearly-marked button.

It is worth ensuring that customers not only have to read your terms and conditions, but also have to agree to them by clicking on a button, before they can proceed with a purchase.

Top tips

Lander recommends that your terms and conditions should be on the back of every quote, invoice and purchase order.

To ensure your terms and conditions apply, they should be highlighted each and every time a contract is agreed. Whenever you open an account with a new customer, ensure you send your terms and conditions and have a signed copy sent back to you.

“It’s no good having them on the back of an invoice and assuming they will be enforceable. Good practice dictates that when asked to open an account a supplier should send their terms and conditions and get them accepted in writing by the purchaser. This means that, unless varied, they should be enforceable,” advises Lander.

Getting in the last word

If the worst comes to the worst and a dispute arises, take some advice from Easyform.

It says that ensuring you get the last word before the deal is concluded and dogged persistence in insisting on the application of your terms is still probably the most certain way of winning the battle.Â

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