The need for correct Ts&Cs

By Curtis Law Solicitors

21 Jan 2014

A story recently made headlines regarding a UK firm who impersonated its debtors in order to offload them onto other companies, stating that as a young company they would not have survived with so many bad debts on their books.

by Ian Kay, head of debt recovery at Curtis Law Solicitors

While not a traditional approach, the company reached the conclusion that the act of transferring the customers was the best option to deal with their growing debt problem.

But how was this possible? The answer essentially lies in a company’s terms and conditions – they allowed the company to take this route as an alternate way of dealing with the debts. Although the approach appears right in law, it has caused outrage in some sectors.

So what lessons can be learned?

Don’t be clever with your Ts&CsIf you’re too clever when drawing up your Ts&Cs, sometimes it can be bad for business. An example of this is a former client who supplied services to customers for a paid trial period of several months and if the contract was not cancelled, it would then continue for 12 months. Listed in the company’s T&Cs was a clause stating that all customers had to provide 30 days notice of cancellation.

Towards the end of the trial period there were a lot of disgruntled customers who’d failed to cancel in time, making them liable for the year-long contract. My client had not foreseen the customers would be unhappy with this and then simply refuse to pay -this left them with a large book of relatively small debts of £1000-£2000.

In the end they effectively wrote off a lot of the debt by simply deciding not to pursue it. They changed their business practices and now operate with rolling contracts supported by direct debits.

Always consider what happens if no payment is madeIt’s vital that businesses always consider how they are getting paid and what happens if a customer fails to make payment. There are various options you can add to your Ts&Cs such as guarantees, arbitration clauses and deposits. Sometimes this will be easier with a contract which you discuss with your customer, however there is no reason why standard terms and conditions cannot be amended – just make your customers aware.

Recently I assisted a client who was having building work carried out at their house and were nervous about making a payment in advance as the company they were contracting with were quite young. The solution agreed was simply that the director of the builders provided a director’s guarantee – this made him personally liable if the work was not completed.

This simple solution assisted the parties because it gave my client another option as opposed to simply suing the company. As a result the contract was carried out to both parties satisfaction which is the ultimate goal of any contract.

Always ensure that your Ts&Cs cover what you wantIt may sound obvious but it’s vital you ensure your Ts&Cs allow you to take the action that you want. A common occurrence is clients believe they can do what they want if a customer hasn’t paid, however they could in fact be in breach of their own terms and conditions if they’re not careful.

A simple example is that at a phone company you would expect that if a customer failed to pay they could simply disconnect the service. However if the Ts&Cs don’t cover this then the phone company can’t disconnect and would be liable for the customers losses if they disconnect anyway. On the other hand if the Ts&Cs had been correct from the start, there never would have been a potential claim.

The ultimate message to all business owners is that the start of the relationship with a customer will be the determining factor of how a matter progresses. If you don’t give enough consideration to your terms and conditions or your relationship with a client, don’t be surprised if you struggle to receive payment in the future.Ian Kay is the head of debt recovery at Curtis Law Solicitors. He has a wealth of experience recovering debts of varying amounts, achieved by taking the time to understand each individual business he works with.

Enjoyed this? Read more from Curtis Law Solicitors

Latest news

1

Chiptech announces major innovation initiative at high-profile reception with the New Zealand Prime Minister in London. The Rt Hon Jonathan Reynolds, the Rt Hon Christopher Luxon and the Rt Hon Steve Reed (L-R Front Row) David Hammond, and Daniel Knowles

Chiptech announces major innovation initiative at high-profile reception with the New Zealand Prime Minister in London.

30 Apr 2025

2

Northstone secures full planning permission for 50 new homes in Edenfield Edenfield housing development

Northstone secures full planning permission for 50 new homes in Edenfield

29 Apr 2025

3

Ring Stones Maintenance and Construction celebrates completion of Dovestone Gardens Dovestone Gardens launch

Ring Stones Maintenance and Construction celebrates completion of Dovestone Gardens

29 Apr 2025

4

PHX Training welcomes new business leader to drive learner success Louise Kirby

PHX Training welcomes new business leader to drive learner success

29 Apr 2025

5

Lidl to invest half a billion pounds in its expansion as it eyes sites in Lancashire Lidl

Lidl to invest half a billion pounds in its expansion as it eyes sites in Lancashire

29 Apr 2025

Pc Prestonmacan Gif980x120 March
Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
LBV122 May/June Launch Event
121 Lancashire Business View Magazine Launch
Networking
21 May 2025

LBV122 May/June Launch Event

Lancaster and Morecambe College, Lancaster, LA1 2TY

08:30 - 10:30

Sub36 Networking
Networking
11 Jun 2025

Sub36 Networking

British Jewellery School, Scorton, PR3 1BA

15:00 - 17:00

Lancashire Net Zero Carbon Conference
Net Zero Carbon Social 1200px 2
Networking
18 Jun 2025

Lancashire Net Zero Carbon Conference

Crow Wood Hotel & Spa Resort, Burnley, BB12 0RT

08:30 - 13:00

Lancashire Built Environment Conference 2025
BEC 315 X 315 Px
Networking
25 Sep 2025

Lancashire Built Environment Conference 2025

Blackpool Football Club, Blackpool, FY1 6HX

08:30 - 13:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

RISE - The Academy for Female Leaders and Managers
WENDY BOWERS RISE Illustrstion copy.jpg.jpg
LBV Hub Seminars
02 Apr 2025 - 08 Oct 2025

RISE - The Academy for Female Leaders and Managers

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:00 - 15:30

Planning for the future + navigating Inheritance Tax changes
Planning for the future + navigating Inheritance Tax changes for website.png.png
LBV Hub Seminars
01 May 2025 - 01 May 2025

Planning for the future + navigating Inheritance Tax changes

Stanley House Hotel, Mellor, Blackburn, BB2 7NP, Blackburn, BB2 7NP

08:00 - 10:30

Advantage: AI – A Workshop for Business Leaders – May 2
EV-land-2025-05B.png.png
LBV Hub Seminars
02 May 2025 - 02 May 2025

Advantage: AI – A Workshop for Business Leaders – May 2

Door4 Office, Burnley Wharf, Manchester Road, Burnley, BB11 1JG

09:00 - 11:00

A night at the races
1.png.png
LBV Hub Dinners / Balls
02 May 2025 - 02 May 2025

A night at the races

Morecambe FC, Morecambe, LA4 4TB

19:00 - 23:59

Celebrating 50 years of KTP
UCLanAerialCampus.jpg.jpg
LBV Hub Networking
07 May 2025 - 07 May 2025

Celebrating 50 years of KTP

University of Central Lancashire , Preston, PR1 2HE

16:00 - 18:00

Research and Knowledge Exchange Showcase
13421_research_knowledge_exchange_2025_600x300.jpg.jpg
LBV Hub Awards
07 May 2025 - 08 May 2025

Research and Knowledge Exchange Showcase

University of Central Lancashire , Preston, PR1 2HE

09:00 - 17:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more Lbv121 Online Graphic
Subscribe now

Weekly news bulletin