Standard Terms and Conditions for Small Businesses: What Should be Included?

When creating a business relationship with your customers there is often nothing more important than the terms and conditions (T&Cs) upon which you agree to do something.

These T&Cs act as a compass, guiding the business relationship between you and your customers. This article looks at the importance of T&Cs, their components, and how to craft and update them effectively.

What are Terms and Conditions?

T&Cs, also known as business terms, terms of sale, or terms of service, are the basis of the legal contract between you and your customer for your supply of goods or services. They are the conditions on which you agree to do business with someone, often on a non-negotiable take-it-or-leave-it basis. In the UK, it is crucial for businesses to have T&Cs in place to protect both themselves and their customers.

The Importance of Terms and Conditions

T&Cs are vital in setting out what you have agreed with a client or to set out what you have not agreed to do or provide when you have a business deal. They act as the core points of the agreement and define the contract, set out business procedures, protect your business and your rights and limit your liability. Any disagreement with a client or customer can take up time, cost and possibly lead to reputational damage. Hence, having a comprehensive set of T&Cs is not only good business practice but also lets all parties known what can and cannot be done within the contract.

Components of Terms and Conditions

A well-constructed T&Cs document should include the following provisions:

• Definition of the Contract – Basis or Subject Matter. Your T&Cs should clearly state what you are selling or providing. The products and/or services could be described in detail or by reference to another document, such as a sales brochure or your website.
• The Price – This can be used here to include variations in an agreement that might come up (dependent on the type of business conducted) and changes in circumstances as well as provisions for price increase.
• Payment Terms – This section should set out how you are seeking payment and often will set out how this is to be paid. The T&Cs can also be a useful point to add provision for when payment is not made on time or not paid at all.
• Definition of the Services Procedures – How much detail you should give depends on your business. Avoid cluttering your T&Cs with half promises and sales talk and provide the main terms.
• Provisions Relating to Carriage, Delivery, Risk and Insurance – This can often be the point that there is an issue. For e.g. if the delivery of a product or service is delayed then what happens? Does the customer have the right to some level of compensation or do you set out that this could happen and parties will need to be reasonable.
• What Happens While the Contract Runs? Often a useful point here is to set out the team that will be dealing with the customer with contact details. Also to set out the stages to be covered under a contract.
• Termination Provisions – You need to consider how long your contract will last, the trigger for termination and the consequences of early termination.
• Limitation of Liability – These terms limit the damages that you have to pay to your customer if your goods or services fail.
• Protecting Your Business – This area is usually covered in a number of separate provisions. Some such provisions might include force majeure (circumstances beyond your and the customer’s control), confidentiality, or non-disclosure of information or restriction of the extent of any claim.
• Intellectual Property Rights Protection – Your intellectual property may be very valuable. Use and ownership of intellectual property is particularly important in the context of an Internet business.
• The Role of Privacy Policies – Privacy policies that outline how businesses collect, store, and use customer data are a crucial part of T&Cs. Businesses must comply with UK data protection laws, including the General Data Protection Regulation (GDPR) as present in UK law.
  Compliance with UK Consumer Protection Laws. Businesses must adhere to UK consumer protection laws, including the Consumer Rights Act, which outlines the rights of consumers when purchasing goods or services.
• Any terms and conditions should be written in clear and concise language, and businesses should ensure that customers fully understand what they are agreeing to when making a purchase.

Writing Your Terms and Conditions

Creating your terms and conditions can be done in several ways. The use of templates and standard documents could result in key business activities not being protected. It’s often recommended to instruct a lawyer to draft them to ensure they reflect what you intend. Businesses should ensure that their terms and conditions are tailored to their specific industry and customer base and are written in clear and concise language.

Updating Your Terms and Conditions

Once your terms and conditions are in place, it is important to regularly review and update them to ensure that they remain relevant and effective. Businesses should review their terms and conditions at least once a year or whenever there are changes to laws or regulations that may impact them. It is also important to notify customers of any changes to the terms and conditions, including providing them with a copy of the updated document.

Legally Binding Nature of Terms and Conditions

T&Cs are legally binding and form a part of the contract between you and your customer. It is good if not best practice to direct all new customers to your T&Cs and have them sign them to say they have read them.

Where to Place Your Terms and Conditions

Position your T&Cs in a prominent place, often on your website and ensure they’re easily accessible through hyperlinks. If you require a sign-up form from new customers, acceptance of your website terms should be mandatory, and definitive acceptance of them sought, e.g. “click this button to accept our Terms and Conditions”.

Changing Your Business Terms and Conditions

Most T&Cs include a provision that allows the business to change the Terms and Conditions at any time. If you have regular clients or customers, it’s best to inform them in writing that your standard T&Cs have changed and what this means for them. To avoid any misunderstandings that may lead to disputes, have the client or customer sign the new T&Cs to acknowledge receipt.

Conclusion

Having effective terms and conditions in place is essential for any UK business. They provide a clear understanding of the terms of sale or service, protect the business and customers, and ensure compliance with UK laws and regulations.. If you’re unsure about how to draft your terms and conditions or need help updating them, consider seeking legal advice. By taking the time to ensure that your terms and conditions are effective and up-to-date, you can protect your business and provide your customers with a positive experience.