Terms & conditions should be the first legal document every social enterprise start-up puts in place when setting up a new business, but often they’re not even given a thought. The focus is always on getting that first customer and making a sale but without a contract or terms & conditions, there’s a real risk of something going wrong.
At BEB, we see time and time again clients coming to us after they’ve had an issue. Invoices being chased, obligations being disputed, contracts being walked away from, and dissatisfied customers doing all they can to get a refund. Without a contract or terms & conditions in place, it’s difficult for a business to show what has been agreed for the price.
In our experience, start-ups either end up with nothing in place at all, or they copy someone else’s, either from a previous employer or by downloading a free template. This is dangerous; we’ve seen versions with illegal clauses, Ts&Cs that are far too long and complicated and some that are completely irrelevant!
It’s true that oral contracts are just as enforceable as written contracts, and with email trails documenting discussions and agreements, there’s proof of the contract, right? However, this can still create uncertainty. The legal fees could easily spiral if a lawyer has to help interpret a contractual dispute by reading through countless emails. Having one document where everything is clear and well-structured is far less time-consuming and usually results in a much better chance of problems being resolved before needing legal advice.
So, what are the specific benefits of having a bespoke set of terms and conditions?
Terms and conditions set out exactly what has been agreed between a business and its customer – they should sit alongside, and tie in with, the quotation. This is what the business needs to fall back on in the event of a dispute. If it’s not written down, it’s almost impossible to claim that something (a price, added extra or level of service, for instance) was agreed.
The biggest risks are often:
- Price and payment: which includes having the confidence as a start-up to make sure one gets paid on time by considering taking deposits and payments up-front.
- Intellectual property: protection for what the business has created.
- Liability: limiting what the business is responsible for (to the extent permitted by law). For example, if a web designer creates and hosts a website, which then goes down, are they responsible for getting it back up and running, or for the huge order their customer might have received had the website been working?
- Cancellation: considering how much time the business would need to find another job to replace a cancellation.
Terms and conditions don’t only protect a business, they also protect the customer. Many businesses aren’t aware of the need to offer consumers a 14-day cooling off period for distance selling – and this could land them in considerably hot water; either they start work without obtaining a waiver of these rights (in which case the consumer could legally pay them nothing) or they find themselves under investigation by Trading Standards – both could be avoided with properly written Ts&Cs.
It’s also crucial that businesses understand how they can ensure their terms are legally effective and incorporated into the contract; it’s no good having a brilliant set of Ts&Cs that sit in the drawer and aren’t effective.
Clarity is key – make sure everything is in plain English. If the customer doesn’t understand what they’re entering into, the business may not be able to rely on their Ts&Cs should an issue arise.
The presence of terms and conditions add to the professionalism and perceived size of any business. They demonstrate that the business knows what they’re doing and their customers can feel confident when entering into a contract with them. In particular, when tendering for work with larger companies, a well-drafted set of Ts&Cs will go a long way to getting that vital foot in the door.
If you need help getting your Ts&Cs in order, BEB can help. Give us a call on 01604 217365 or drop us an email at firstname.lastname@example.org.