Terms & Conditions
Terms of business set out the basics of your relationship with your customer. They state each party’s obligations and must be effectively incorporated into your relationship.
Incorporation
You should consider how you will engage customers and provide your terms. This could be online, by completing an order form or by agreeing a specification or scope.
Consumer or business?
You may need separate terms for consumers and businesses due to differences in applicable laws. Consumer law offers additional protections and requires simpler wording, whereas business terms may be subject to negotiation which can be pre-empted by adopting compromises in the terms.
Intellectual property
Your terms should clearly set out who owns intellectual property rights in any deliverables, as well as any pre-existing intellectual property, if relevant.
Term
The term is the duration of the contract. This can, for example, be expressed as a minimum contractual period followed by an automatic renewal provision. Termination notice conditions should also be considered.
Fees
The price of the goods and/or services should be specified, along with how and when payment is made.
Incorporation
Consumer or business?
Intellectual property
Term
Fees
You should consider how you will engage customers and provide your terms. This could be online, by completing an order form or by agreeing a specification or scope.
You may need separate terms for consumers and businesses due to differences in applicable laws. Consumer law offers additional protections and requires simpler wording, whereas business terms may be subject to negotiation which can be pre-empted by adopting compromises in the terms.
Your terms should clearly set out who owns intellectual property rights in any deliverables, as well as any pre-existing intellectual property, if relevant.
The term is the duration of the contract. This can, for example, be expressed as a minimum contractual period followed by an automatic renewal provision. Termination notice conditions should also be considered.
The price of the goods and/or services should be specified, along with how and when payment is made.
You may also wish to periodically increase your prices or pass expenses on to customers.
If providing a service, specifying whether the price is fixed or based on a time and materials basis is helpful. Extra rates for overtime, and how these will be calculated, should also be considered.
Warranty
Warranties in relation to your goods and/or services should be included in your terms, along with any conditions and the procedure for making a warranty claim. You can provide different warranties for different goods and/or services.
Services
You should consider how (and in how much detail) you will set out, or agree, the specification. This could include whether specifications or statements of work are to be provided on a case-by-case basis, any deliverables and any approval or acceptance processes.
Goods
How you provide specifications or details of the goods to customers should be considered, along with the nature of the goods. Provisions on how the goods can be used if payment occurs upon receipt, guidance on use and storage of the goods, delivery (including risk in transit) and when title to the goods passes to the customer should all be included in the terms.
Limitation of liability
Limitation of liability clauses are a useful way of balancing risk in a commercial contract. Liability can be limited under the contract by excluding certain types of loss or utilising a financial cap.
There are certain liabilities which cannot be limited, including liability for death or personal injury resulting from negligence. Any attempt to do so could render the entire limitation of liability clause unenforceable.
Exclusions or limitations contained in standard written terms have to be ‘reasonable’ because the contract has not been freely negotiated by the parties. Factors to consider include the parties’ relative strength of bargaining position, the availability of insurance and the information available to both parties when the contract was drawn up.
Warranty
Services
Goods
Limitation of liability
Warranties in relation to your goods and/or services should be included in your terms, along with any conditions and the procedure for making a warranty claim. You can provide different warranties for different goods and/or services.
You should consider how (and in how much detail) you will set out, or agree, the specification. This could include whether specifications or statements of work are to be provided on a case-by-case basis, any deliverables and any approval or acceptance processes.You should consider how you will engage customers and provide your terms. This could be online, by completing an order form or by agreeing a specification or scope.
How you provide specifications or details of the goods to customers should be considered, along with the nature of the goods. Provisions on how the goods can be used if payment occurs upon receipt, guidance on use and storage of the goods, delivery (including risk in transit) and when title to the goods passes to the customer should all be included in the terms.
Limitation of liability clauses are a useful way of balancing risk in a commercial contract. Liability can be limited under the contract by excluding certain types of loss or utilising a financial cap.
There are certain liabilities which cannot be limited, including liability for death or personal injury resulting from negligence. Any attempt to do so could render the entire limitation of liability clause unenforceable.
Exclusions or limitations contained in standard written terms have to be ‘reasonable’ because the contract has not been freely negotiated by the parties. Factors to consider include the parties’ relative strength of bargaining position, the availability of insurance and the information available to both parties when the contract was drawn up.
