The danger of drafting your own terms and conditions
4 min read
19 July 2016
As the owner of a business you already have plenty of issues that require your consideration. But above all else, Gemma Lingard of Gorvins Solicitors suggests bosses know more about the danger of drafting their own terms and conditions (T&Cs).
It’s likely that you’ll have lots of business to attend to already: clients to talk to, products to buy and sell, services to provide, relationships to develop, marketing and advertising, not to mention a possible family at home. As such drafting your own watertight set of terms of business, known as terms and conditions, may be a stretch too far. In fact, it could leave your business in danger of all sorts of repercussions, which is why drafting terms of business is a speciality area of law.
I and my colleagues here at Gorvins have helped out business owners in the past who drafted their own terms based on an article they read in a national newspaper. The T&Cs did address the main areas of business, but both the owner and their business would have benefited greatly from professional advice.
We often come across a variety of terms of business, including but not limited to:
•One or two lines printed at the bottom on an invoice;
•A set cobbled together from a variety of different sources (usually from the internet); and
•Several pages of text often “adapted” from a competitor.
Areas of danger
(1) Payment terms
Perhaps the main area entrepreneurs and owners should get right is the payment terms; this is when they can raise an invoice and when the invoice is payable. These are the very basic points but a professional will also look at and draft in manner other important aspects, such as exit routes for your business if a customer isn’t paying, limiting your liability under the T&Cs if a doomsday scenario occurs and how to resolve unforeseen issues for example a client being unable to deliver on a contract.
Thinking about more than just the surface issues can help to greatly decrease your exposure and hence future costs further down the line.
(2) Issuing the terms and conditions
Issuing the T&Cs at the right time is essential to get right and with the right professional advice, instead of copying a competitors terms and conditions, your business can receive a huge advantage. A common mistake that we see if writing the terms of business on the back of an invoice.
The reason for this is that an invoice is issued after business has been done. From a contractual point of view, a contract is formed when one party makes an offer to another and this is accepted – well before anyone sees any invoices. The T&Cs need to be incorporated into the contract at the “acceptance” stage, as you may struggle to rely on your terms if there is an issue in the future.
(3) Tailoring your terms
Getting an “off the shelf” set of T&Cs is not going to do justice to your business. Your company is unique for this the reason it is vital that you sit with a professional who can take the time to understand the nature of your business and produce a tailored set of terms of business, including any clauses which are slightly unusual or unique to your sector.
Gemma Lingard is a corporate-commercial lawyer at Gorvins Solicitors.
Many of you will have some form of terms and conditions in place for your business – most of which will probably be viewed as a load of legal mumbo jumbo that nobody pays attention to. But T&C’s are important, and here’s why.