Legally binding standard Terms & Conditions – 2 simple steps every business should take

If you supply goods or services, you probably use a standard “Terms & Conditions” document that sets out the basis on which you do business with your customers. Your terms and conditions are a critical document, and no doubt contain important provisions that may need to rely on in future. It is therefore vital that you take some basic steps to ensure that your terms and conditions are legally binding.

Here are two simple steps that every business should take.

1. Attach a copy of your Terms & Conditions at the earliest opportunity

Avoid entering into significant correspondence or negotiations with a customer and then only later providing your terms and conditions. Send a copy as early as possible. For example:

• If you use credit account applications, make sure that your terms and conditions are attached to the application. If you want added peace of mind, insert a line at the bottom corner of each page of the terms and conditions for your customer to initial.
• If you provide quotes to your customers, insert a line on your quote that reads: “This quote is subject to our standard terms and conditions, a copy of which is [attached] [available at www.XYZ.com].”
• When providing an invoice, include the same wording as for quotes, but start with the word: “This invoice is subject to…” This time it should be sufficient to refer to the hyperlink for the terms and conditions rather than attaching another copy.

2. If your terms and conditions contain any onerous clauses, alert your customer to this

Some terms and conditions include onerous clauses such limitations of liability or requirements that any claims against your business will be barred if not made within a certain time. If you do not draw attention to clauses such as these, your customers may be able to legally wriggle out of them.

How can you reduce this uncertainty? When providing a quote for example, in addition to having the wording “This quote is subject to our standard terms and conditions”, add the wording “which contain important limitations and exclusions which may affect your rights against us”.

The above are just two simple measures you can take to improve the enforceability of your terms and conditions.

For a FREE 30 MINUTE discussion regarding your terms and conditions and the processes you have in place, please contact us by telephone on 03 8683 5645 or email at [email protected]