HR & Management
Used effectively, terms and conditions are vital to your business
3 min read
02 December 2015
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.
That is not the case at all – terms and conditions are actually key to protecting and growing your business. Here’s why:
Terms and conditions can help to improve the efficiency of your business. They should clearly set out terms for day to day business such as payment and delivery.
Looking at payment terms, what is included in the price? When is payment for the goods or services you are provided to be made? It needs to be crystal clear what your payment terms are. If terms are not clear then you could have problems with getting paid, which will have a negative impact on your business’s cash flow.
Your terms and conditions could also include an early payment discount – for example a five per cent discount if you are paid within ten days rather than 30. It gives your customers an incentive to pay and it gets money into the business, improving your cash flow without you having to waste time and resources chasing payment
As with payment terms, delivery terms need to be clear to avoid situations which could effect customer relations and cost your business money.
If your contract with a customer does not state a specific delivery date, then the law says that the goods should be delivered within a reasonable time. This should not be an issue on the majority of occasions.
However, issues may arise if your agreement with the customer specifies a date for delivery. Depending upon what your terms and conditions say you may have to honour specific delivery dates or risk the contract being ended or being sued.
One size does not fit all!
What your terms and conditions say can have a significant impact on everyday business. If they are clear and do what you want them to do then they can improve your businesses efficiency by improving vital areas such as cash flow. They can also act as a shield and protect your business from action such as being sued.
In order for terms and conditions to work in this way they need to reflect the way that your business runs and be tailored to your businesses specific needs. There are many standard terms and conditions available on the internet for download, but these will not reflect the specific requirements and ways of your business.
As a result, they will not perform as you need them to. To fully protect your business, your terms and conditions need to cover a wide variety of areas – mainly surrounding what happens when things go wrong. The terms must also be carefully displayed as there are specific legal rules about bringing them to a customers attention.
Luke Rees is partner at Fidler & Pepper Solicitors.