For many new start-ups and small businesses having a robust set of terms and conditions (T&Cs) is not the first priority. But getting your T&Cs right is crucial to the smooth operation of your business and ensuring healthy cashflow.
Why are T&Cs important?
Terms and Conditions are the backbone to the relationship between your business and your customers.
Well-drafted T&Cs are important for many reasons, including:
- Get paid
First and foremost, T&Cs set out how and when you get paid and what happens if payments are missed. Without clear expectations, you risk not getting paid on time (or at all)!
- Reduce your risk
Second, T&Cs can help to reduce the risk to your business such as by limiting your legal liability in certain situations. Such as, allowing you to register a PPSR interest to protect your rights if a customer becomes insolvent.
Not having T&Cs can lead to uncertainty and misunderstanding, particularly if your customer has their own T&Cs. Having T&Cs and ensuring that these apply provides clarity about what should happen in any given situation. This includes what happens when a customer breaches the terms and the steps your business can take to enforce them.
- Improve customer confidence
Developing long-standing relationships with your customers is key to building a successful business. Clearly stating the terms will enable your business to meet your customer’s expectations when it comes to matters like delivery and payment.
What should be included in your T&Cs?
It is important you consult a lawyer and avoid simply copying another business’ terms. This is because no two businesses are the same and their customers and business practices will inevitably differ.
Broadly speaking, you should ensure your Terms and Conditions address the specific needs of your business, which will likely involve the following key terms:
- Goods and/or services – outline a clear description of the goods and/or scope of services your business offers and how they will be provided.
- Payment – set out the fees to be paid by the customer, the required payment methods, due date(s) for payment, and any consequences for failure to pay.
- Termination – explain how and when your business or the customer can terminate the agreement.
- Intellectual Property – make sure your intellectual property rights are clearly defined and protected.
- Liability – protect your business byincluding a liability provision that limits the liability of your business in certain circumstances.
As your business continues to grow and develop, and laws are amended or introduced, it is important to review your T&Cs on a regular basis to ensure they are up to date.
We have extensive experience in drafting tailored T&Cs for businesses of all sizes and across a range of industries. To ensure you have a robust set of T&Cs which protect your business, please do not hesitate to contact us for a fixed-fee quote.