Terms and conditions

All too often standard terms of business are given a low priority and may only be given detailed consideration when a dispute arises, by which time it may be too late.

Standard terms have the advantage of saving time and expense incurred in negotiating separate contracts.

They provide a framework for how each transaction will be dealt with and enable a company to impose terms favourable to itself, vary statutory terms, and limit its liability.

However even businesses that have well-drafted standard terms fail to protect their business because they do not implement the correct procedures when contracting with a customer or supplier.

So what should you be doing to get the best out of your standard terms?

• ensure that standard terms are brought to the customer’s attention at the earliest possible opportunity – once a contract has been concluded no new terms can be introduced

• a contract is concluded when an offer is unequivocally and unconditionally accepted – make sure that any quote or estimate is made on your standard terms and that you accept an offer subject to your standard terms

• all sales staff should be made aware of the company’s procedures and adhere to them at all times – consider whether contracts over a certain value should be referred to the legal department as the standard terms may be inappropriate

• be wary of completely excluding your liability for all loss – such terms have been found to be unenforceable

• if a term is unusual then you should draw the customer/suppliers attention to it on the face of the document

• when introducing new standard terms, a copy should be sent to every customer stating that the new terms will apply in future. This is also an ideal opportunity to enclose a slip for return by which the customer acknowledges receipt of the new terms which would provide invaluable evidence of acceptance of new terms

If you want advice in relation to using standard terms of business, or need help in resolving a contractual dispute, call a member of our commercial team and we will be happy to help.

Ian Liddle, partner, Farleys Solicitors LLP.