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Home » Latest News » Terms & Conditions of Sale – what businesses need to know

Terms & Conditions of Sale – what businesses need to know

Terms & Conditions of Sale – what businesses need to know

Terms and conditions of sale can be a useful tool which helps businesses get paid and reduce their risk of expensive disputes. They most commonly apply between your business and its customers.

Selling goods or services without written terms in place can leave your business open to customers withholding payment; arguing about what you agreed to supply; and looking to hold your business responsible for things outside of its control.  All which could harm your business and damage relationships with important third parties.

What are ‘terms & conditions of sale’ and what should they include?

Your terms & conditions of sale are simply part of the contract under which your business provides goods or services.  Often they will be in a standard form – not changing from customer to customer – other than specific details which will vary such as price, delivery dates, etc.

Businesses will sometimes have bespoke contracts produced for larger or more one-off sales, but having a set of standard terms & conditions helps reduce the admin burden and keep legal costs down.  We also find that ‘standard’ terms are less likely to be reviewed and negotiated.

They should include things like:

  • What goods/services you will provide, to what specification, how long they are guaranteed for, etc.
  • How much you expect to be paid (and when).
  • What happens if you are not paid, for example can you demand that your goods are returned to you?
  • What each party to the contract will do.
  • Who you are contracting with. And whether any guarantee from a third party is required (e.g. to increase the chances of you being paid by a limited company with little trading history or few assets).
  • A limit on your liability should something go wrong.

How often do they need updating?

This depends upon your business, but as a general rule they should be updated each time your business changes the way in which it operates and briefly reviewed every couple of years to check the effects of any changes in the law.  As a client of Bridge McFarland you will be provided with regular updates in the law, how they might affect your business and details of any actions you should take.

How are terms & conditions incorporated into contracts?

No matter how good a set of terms and conditions are, if they are not correctly incorporated into your contracts with customers they are of little or no use.  The most effective way is to have a signed contract for every transaction; however this can be time-consuming and cumbersome.

Businesses can adopt more practical methods of incorporating terms and conditions into a contract, such as by having their terms and conditions make up part of the ordering process (e.g. on the back of order acknowledgments), being made available on their website, referred to in email footers, etc.  Ultimately how best to make sure that your terms & conditions are incorporated into your contracts will depend upon what you do and how you operate in practice.

If you have any questions or would like more information about how terms and conditions can assist your business, please contact our commercial department for more details.