Terms and conditions of business

Terms and conditions essentially set out what is expected from each party to a contract. Although there are some differences depending on the nature of the business, certain factors always need to be outlined. For example, payment terms are a critical element of all terms and conditions. Are upfront payments required? Is it payment on delivery? Where there are services involved it is also necessary to consider how the fees will be calculated and when they should be paid.

Other issues which need to be dealt with in the terms and conditions include how interest will be calculated where there is default, or how the contract can be terminated due to non performance from either party. Information relating to the actual product or service being offered and any conditions that are associated with these offerings will also be covered.

Website based terms and conditions 

When goods and services are offered online they face additional requirements in terms of what needs to be stated during the purchasing process.

With a website it can be difficult to ascertain where exactly the product or service is coming from and who is providing the service including their credentials. Other information such as how the contract can be cancelled should be contained and a clear way of allowing consumers to contact the provider if they wish to change the order or cancel. As this is a distance selling situation there are other requirements that must be met such as offering a cooling off period for purchasers.

Goods must also meet certain description standards, whiles security issues, such as how to accept payments online will also be relevant. Ensuring the website is adequately updated and managed will become part of the regular business decision-making processes.

Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013

The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 require traders to give their customers certain information.

Distance or off-premises sales
 
Information which the trader must provide includes:

  • a description of the goods, service or digital content;
  • the total price of the goods/services or the way the price will be worked out;
  • how goods/ services will be provided and paid for;
  • delivery charges and other costs;
  • details of who pays for the cost of returning items if a right to cancel exists;
  • cancellation rights, including a standard cancellation form;
  • information about the seller, including their address and contact details and the address and identity of any other trader for whom the trader is acting;
  • compatibility information of digital content with hardware and other software that the trader knows about.

On-premises sales

 The trader doesn’t have to provide as much information for onsite sales, but information about the goods or services being bought, the price, the compatibility of digital content and details of any delivery costs must all be provided.

Traders who fail to provide the requisite information in the manner stipulated in the regulations, could result in cancellation rights being extended by up to a year. The information must be given in writing in a ‘durable medium’ such as on paper or by email, or verbally if the contract is made by phone.

Practical considerations with terms and conditions

The business model

The form terms and conditions take will depend on the nature of the business. A one-man electrician is not going to want to use terms and conditions extending over multiple pages. On the other hand, a company that offers very complex products or services will need to have multiple terms and conditions to deal with the various different eventualities.

Ongoing management

Terms and conditions will change on a regular basis to take account of the business itself and also to deal with changes in legislation and regulations. As new distribution channels become available it is likely the terms and conditions will have to be reviewed. Copies of signed terms and conditions should be kept on file and these need to be regularly updated for long term clients.

Practical tips

  • Consider the appropriate nature of the terms and conditions for the business type in question.
  • Look at all distribution channels such as websites to ensure the terms are appropriate in all circumstances.
  • Regularly review the terms and conditions as climates change and requirements are amended to take account of changes in the business.