I have been asked this question many times over the years, usually followed by the comment, “My business is doing fine, I have no need for Terms and Conditions”.

But having clear Terms and Conditions is essential to getting your business in order.

Let me give you 5 reasons why…

  1. When a customer or client comes along, do you know them? The answer will usually be no. Therefore, if you want to do business with them, you will need PROTECTION.
  2. What about your order form? It should be clear from your Terms and Conditions that the order form is part of the contract that specifies the exact quantity and specification of what is required from your business and exactly what your customer has requested. Your Terms and Conditions is a good place to neatly deal with the issue of order forms.
  3. If you are supplying goods, how do you know when ownership transfers to your customer and the goods become their responsibility? There should be a provision in your Terms and Conditions outlining that ownership of the goods only passes to the customer on receipt of payment in full and not on completion of delivery. The responsibility and risk for the goods should be clear and detailed so that the risk in the goods passes on the basis of a specific time and event.
  4. If payment for goods or services isn’t forthcoming, what will you do? There needs to be a payment section in your Terms and Conditions. You must set out your terms of payment, for example, payment must be made within 14 days. If payment is not made within this time, you may charge interest on the overdue sums. If payment remains due, for say over a month, you have the right to place them on stop and to take further action for recovery. You need a clause to cover your costs of recovery. Why should you be out of pocket? As part of the contractual terms you can claim back the costs of recovery if further action is required. Wording is key here.
  5. What if you or the other party needs to terminate the contract? It is important to deal with the issue of termination in your Terms and Conditions. You should set out how termination will work and what the logistics are around the return of goods.

These are only 5 reasons why you need Terms and Conditions of business. There are a lot more. Terms limit your liability in regard to some situations.

Within your business you may require terms covering copyright and intellectual property, your products and services, maintenance contracts, limitation of liability, refund policy, shipping and delivery conditions, if dealing internationally – governing laws.

To my mind, the case for Ts&Cs is compelling. Every business needs them, no matter what service you provide or product you sell.

For more information about debt recovery or Terms and Conditions of business, phone 01782 205000 or email enquiry@beswicks.com.

Or for more tips on how to get your business ‘fighting fit’ check out our series of briefings compiled by our highly-regarded dispute resolution team.