Terms and Conditions (T&Cs) are a critical component of any business and are essential to protect the interests of both the business and its customers. In this blog, we’ll explore the importance of T&Cs and why every business should have them in place.

What are Terms and Conditions?

Terms and conditions are a set of rules and guidelines that govern the relationship between a business and its customers. They outline what the business will and won’t do, the payment terms and what the customers can expect from the business in terms of services and products. T&Cs also include information on warranties, returns and refunds, payment and delivery, and other important details.

Why are Terms and Conditions so Important to Businesses?

Terms and conditions serve as a legal agreement between the buyer and the seller, setting out the terms of the transaction. They help to protect the rights and interests of both parties and ensure that the transaction runs smoothly. A well-drafted set of terms and conditions will provide clarity on the responsibilities of each party, payment terms, delivery time frames, and any warranties or guarantees offered. 

What should be included in typical set of terms and conditions?

Price: The price you have agreed for the services needs to be clearly set out in your Quote /Terms.

Payment terms: How payment can be made (e.g by credit card, PayPal) and when it is to be paid. Without this, how could you claim payment is late if there was no written agreement about the due date for payment.

Ability to charge interest on late payment: In order to be able to charge interest you need to include this right in your Terms, stating the rate of interest and how it is to be calculated (for example that it is calculated daily, on any amounts unpaid after the payment date).

Debt recovery costs: It costs money to pursue a debt and you want your non- paying customer to pay any debt recovery charges you incur. But there is no right ‘at law’ to collect these fees and so you must have a clause which states that you have the right to engage debt collection services for the collection of unpaid and undisputed debts.

Ability to suspend work: Consider adding a clause which provides that – if your customers do not pay you by the payment date, you may cease to provide the Services until you receive payment.

Termination provisions: Consider adding various different termination provisions setting out the circumstance in which you can terminate the agreement without being in breach. For example, where an invoice is overdue and your customer fails to pay an invoice by the due date.

No liability for delay: Especially in light of the recent COVID-19 pandemic it is more important than ever to include a Force Majeure clause in your terms – this should provide that you will not be liable for any delay or failure to perform your obligations if the delay is due to any circumstance beyond your reasonable control.

There are 7 clauses that you must have in your business terms and conditions!

1. Interest on Late Payment Clause: This is where the contract specifies the interest rate that can be charged if a payment is not made on time, the interest rate that will be charged, the date from which the interest will begin to accrue.

2. Debt Collection Fee Clause: This clause outlines the rights and obligations of the business in the event that the customer fails to make payments on the due date including the types of action which may be taken to collect the debt whilst highlighting applicable laws and regulations they need to comply with.

3. Delay Clause: This clause will addresses what happens if the business is unable to perform its obligations on time due to certain reasons, such as unexpected events, changes in circumstances, or other factors beyond its control.

4. Force Majeure Clause: This clause details what happens if the business is unable to perform their contractual obligations due to unforeseeable and unavoidable events that are beyond their control. These events may include natural disasters, war, strikes, government actions, or other events that are not caused by the business.

5. Termination Clause: This will detail the circumstances under which the parties to the contract may terminate the agreement. Items which should be addressed include; The conditions under which the contract may be terminated, the notice requirements for terminating the contract, the procedures for addressing the termination and any actions to be taken on terminating the contract. 

6. Suspension Clause: This clause will outline the circumstances under which the business may suspend or delay the performance of its obligations under the contract and may also provide clarification on the notice requirements for the party seeking to suspend or delay its obligations, procedures for addressing the suspension (such as extending the deadline, revising the scope or terms of the contract, or terminating the contract), and any limitations on liability or damages for the party seeking to suspend or delay its obligations.

7. Acceptance Clause: This clause specifies the process and requirements for accepting the terms and conditions of the contract. Typically this should include the deadline or timeframe for accepting the contract, the method for accepting the contract (such as signing a physical document or clicking a button on an online platform), any additional requirements for acceptance, such as providing a deposit or fulfilling certain conditions and any procedures for rejecting or withdrawing acceptance.

7 Clauses for Terms and Conditions

Having a comprehensive set of terms and conditions is essential for businesses to ensure the protection of both parties involved in the transaction. Trade-based businesses can ensure that the transaction runs smoothly and that any disputes are resolved quickly and efficiently.

If you would like assistance in creating terms and conditions for your business or would look to have an expert look over your existing documentation then please give the team at Rise Legal a call.

To get started, book in for a free 15-minute consultation with one of our lawyers.

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Helen Kay - Managing Director

Helen Kay

If you require any assistance with your business legals or any other commercial legal issue, please do not hesitate to contact me.

Typical Legal Disclaimer!…

Unfortunately, there is never a ‘one size fits all’ formula to apply. Every situation is unique and it can be tricky to wrap your head around some areas of the law. To ensure you are setting yourself and your business up for success, it is always best to consult a legal professional with expertise in the field.

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