Getting the right paperwork in place can quickly fall to the bottom of the ‘to do list’ when setting up a new business. With terms and conditions widely available online, it could be tempting for business owner to simply download a set of terms – just for the sake of having some in place but they will rarely give you the protection you and your business need.
The way in which your terms and conditions are drafted have a significant impact on the everyday business you undertake. Every business has its own unique challenges and by utilising terms and conditions that have been created for someone else, you may well be missing out on certain opportunities or protections they can provide.
Here are three reasons why you should invest in a properly drafted set of terms and conditions.
They can improve efficiency
A set of terms and conditions should clearly set out your terms for routine business such as payment and delivery. When drafted specifically for your business, they will include payment terms that allow you to run your business smoothly – for example if you need to be paid up front in order to provide cash flow to purchase goods. In addition, they can set out any repercussions such as interest or late payment fees. This encourages customers to pay on time and therefore save time and hassle in having to chase debts.
Bespoke terms and conditions can also include other elements, such as any guarantees or warranties you offer, along with timelines for delivery.
They provide protection and clarity
If you have no terms and conditions in place, you are putting yourself and your business at risk. Without written terms in place as to how you will deliver a product/service or indeed as to how you are to be paid for it, it’s likely that disputes will arise and the courts will invariably side with a consumer or recipient of goods/services rather than a seller. Although in some cases there may be an assumption between a buyer and seller of what the terms of sale might be, it always helps to have clarity and have something in writing to fall back on if a disagreement arises.
Imposing a firm set of terms and conditions won’t necessarily alienate potential customers. On the contrary, lack of good terms and conditions creates a risk of uncertainty, giving rise to misunderstandings – certainly not the most desirable way to start a relationship with a new client.
They look more professional
Although not all of your clients or customers will read terms and conditions, some of them will and if they do, having something that relates specifically to your business and industry will certainly give you the appearance of being a professional outfit. This can be especially beneficial if you are trading as a new company; should a potential client have any doubts about working with you, a proper set of terms will go some way to alleviating these.
It is worth noting that in the absence of clear terms and conditions, disputes about what might or might not have been agreed could be raised at any point down the line. The costs of bringing or defending litigation are usually far higher than the costs of having a good set of terms and conditions drafted, and in any event, without legal documentation to protect you, you will have a weaker case.
For more help and advice on terms and conditions from one of our commercial solicitors, please contact us here.