Why are Terms and Conditions so important?

Terms and Conditions are words we hear daily. If we sign up to a gym membership, buy a car or even enter a competition we have to accept the terms and conditions before even being a party to that agreement.  So why is it that not everyone sees the real importance of having them in place when running a small business?

Nine times out of ten clients will come to us AFTER a problem has occurred. Yet a high percentage of those clients would have avoided any of those problems should they have had watertight, robust, and bespoke Terms and Conditions.

What should they consist of?

Terms and Conditions are basically setting out the terms of sale and of your business, and also the conditions that must be met by your clients in order to receive your goods or services. Every single business no matter how big or small, need these clearly written out to determine exactly what the agreement is.

Although they may only be brought out in a worst-case scenario and when something goes horribly wrong, it is vital that they are legally enforceable and adapted specifically for your business to assure you are fully protected. This means no copy and pasting from other similar businesses!!

So, how do you write them?

Firstly you should investigate all your business processes, ask yourself how would you ideally work? What would your ideal client look like and how would that process work? Break it all down in a step by step ‘how to guide’.

  • How do you quote your clients?
  • How do you perform your services?
  • What are your client’s obligations?
  • How they can cancel?
  • And most importantly, how do you get paid?

Once you have these gathered together and written them all out, it will form a good basis for your terms and conditions to work from. These become your most important clauses.

Then ask yourself what would worst case scenario be in your process:

  • What could go wrong?
  • If you had the most annoying frustrating customer ever, how could you protect your business from it?
  • What would or could they likely want to complain about?
  • Again I repeat, worst case scenario!

Write in clear, plain English

Clarity is key, and Trading Standards are hotting up on it. (NB: Trading Standards is the consumer organisation responsible for this in the UK. If you are in another country, you will need to check out the equivalent organisation in your country via your own government’s website.)

Organise the document well, and write it in reasonably plain English. Bear in mind that if you deal with consumers, they have more rights than when you are dealing business to business. You do not want consumers claiming to not have understood what they are entering into. If you have industry-specific jargon, or complex terms that are referred to a number of times in your document, define them.

Definitions should be in a standalone clause listing all these terms and their meanings, before the main body of your agreement. For a more coherent agreement we would suggest using clause numbers and titles, plainly showing what you are explaining.

Further items to write about

Another example of good practice would be to state how and when your contract with them is formed. This shows when your contractual obligations to each other begin.

By writing this it helps in the case of any claims over breaches of contract. And because it clearly states when your begin your legal obligations to each other, it makes it simple to enforce in courts or other legal dealings that in fact there is no question over whether a contract exists in the first place.

And finally…

And a further important note in relation to legalities: ensure your terms and conditions contain your full registered name, any trading names, your company number, and registered address! A simple thing to add to make sure they are legally enforceable.

Although in theory it’s possible for you to write your own Terms and Conditions, it is recommended to seek legal advice from experts like us at BEB when writing them up – either to check you have got everything right, or to draft them from scratch.

This article first appeared on Suzan St Maur’s award-winning website HowToWriteBetter HTWB