Writing Terms and Conditions for a Small Business
Terms and conditions set out the basis on which you trade. They matter only when there is a dispute, which is exactly why they are written in advance.
Incorporation
Terms only apply if they were brought to the customer's attention before the contract was made.
Sending them with the invoice is too late, since the contract formed earlier.
Include them with quotations, reference them clearly in acceptance, and for online sales require positive acknowledgement before purchase.
Particularly onerous terms need to be highlighted rather than buried, or they may not be enforceable.
What to cover
Scope of what you provide, and explicitly what you do not.
Price, what is included, and how variations are priced and agreed.
Payment terms, due dates, and the consequences of late payment including any interest.
Timescales, and whether they are estimates or commitments.
Cancellation by either party and what happens to money already paid.
Liability limits and exclusions, which are the commercially important clauses.
Ownership of any work produced, and when it transfers.
How disputes are handled and which law applies.
Limits on what you can exclude
Consumer protection legislation restricts what can be excluded when selling to consumers, and terms attempting to exclude statutory rights are generally unenforceable.
Liability for death or personal injury caused by negligence cannot usually be excluded at all.
Business-to-business contracts allow more freedom, subject to reasonableness tests in many jurisdictions.
Consumer contracts also attract cancellation rights for distance and off-premises sales in many systems, which must be disclosed.
Practical drafting
Write in plain language. Terms that customers can understand are more likely to be enforceable and cause fewer arguments.
Keep them proportionate. A twelve-page document for a small service contract is rarely read and rarely necessary.
Avoid copying another business's terms, since they were written for a different service and may include clauses that do not apply or are unenforceable in your jurisdiction.
Have them reviewed by a solicitor once, which is inexpensive relative to a dispute and gives you a document you can use for years.
Keeping them current
Review after any change in what you offer, and after any dispute that revealed a gap.
Keep a dated record of which version applied when, since the terms in force at the time of the contract are the ones that govern.
This article is general information and not legal advice. Consult a qualified solicitor about your own terms.
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