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Terms & Conditions- What is the point of them?

Partner Roger Margand shares his views on Terms & Conditions.

Businesses often use standard Terms & Conditions (T&Cs) for speed, consistency, cost and risk allocation.roger-margand-spire-solicitors-norfolk

Most businesses understand that written agreements are so much better because of the above factors and to have written terms that are pertinent to their business or trade.

Using standard T&Cs provides a framework, consistency, can save time and money in negotiation, enhances a party’s bargaining position and provides an opportunity for terms to be imposed on the other party. However, that is not the end of the story.

Good T&Cs need to be used well and incorporated and they always need to be contextualised to the customer or client in question.

Business also needs to be aware of the difference between business to business contracts and contracts concluded with consumers.

In the latter, the room for manoeuvre is considerably limited particularly under The Consumer Rights Act 2015 (which came into force in October last year) primarily because of the rules on unfair terms in consumer contracts. This Act states that an unfair term is not binding and is a term which contrary to the requirement of good faith, causes a significant imbalance and the parties rights to the detriment of the consumer. The Act also contains an obligation for contracts to be legible and drafted in plain and intelligible language. Often businesses have separate business consumer terms as they require special consideration as the seller’s ability to restrict or exclude liability is much more limited and there is a greater risk that terms may not comply with the consumer law, such as The Consumer Rights Act set out above.

The importance of having standard T&Cs cannot be over estimated as they can be fundamental to income generation, provide a framework for day to day operations and allow risks to be managed.

However businesses can sometimes in the rush to turn work over, not properly incorporate their standard terms, use out of date terms that are inappropriate for business needs. These can expose businesses to being subject to the other parties T&Cs which may be more onerous; having the problem of unenforceable provisions contained in their terms or being bound into a bargain they did not want.

Training is also very important to make sure that staff use them at the right point. The worlds best drafted T&Cs are no use if they are not properly incorporated into the agreement in question.

There are very many different approaches to T&Cs and the length and complexity of them. In essence, by using them a business, is buying an umbrella to prevent it from the rain of potential claims. An umbrella that provides you with a greater amount of protection from the rain is by virtue bigger than an umbrella that does not and therefore going to be a longer document.

When exploring what T&Cs are appropriate for our clients businesses, we look at their commercial needs and objectives, their attitude to risk, liability and insurance, the business plan, the credit controls and quality control procedures as well as any current written procedures and what their sales and marketing literature says.

The Business Team offers a wide variety of T&Cs from those clients with a large appetite for risk who only want the basics covered up to those clients who run very specific bespoke businesses and want specific issues signed off.

Please contact me either at Roger.Margand@spiresolicitors.co.uk or my mobile 07754379667 if you would like any further information, have any further enquiries or would like to discuss the fixed quote work we do in this area.