Starting a new business but don’t know if you need written terms and conditions before you begin trading? Read our expert advice on the issue.
Having written terms and conditions (T&Cs) can help to protect you against disgruntled customers and late payers, but not every business needs them.
For example, if you buy chocolate from a newsagent, you would not create a written agreement as the transaction is simple and instant– you either pay for the chocolate, or else you can’t take it.
In many businesses, however, customers place orders for later delivery of a product or service. In some cases, the customer also only pays on completion of the job.
In these scenarios, clarifying the deal in writing reduces the risk of misunderstandings over what is being ordered and the price. This issue crops up frequently among aspiring entrepreneurs attending our regular Starting in Business workshops in Bristol.
You can also specify the rights, duties and responsibilities you and the customer have with respect to each other.
Then if something goes wrong, you are less likely to fall into dispute as you have pre-agreed how tricky situations will be handled. Additionally, if a customer does not pay as expected, and you have proof in writing that they agreed to pay, it is easier to enforce against non-payment.
T&Cs are therefore a form of protection. The exact contents of the terms will vary according to the business, but typically they include:
- Who is the deal between
- Which country’s laws govern the contract
- A clear description of what will be provided
- Any warranties or guarantees offered
- How the job will be paid for and when
- When the work will be delivered
- What happens if either side doesn’t deliver or pay
- How can the contract be cancelled or ended, with what notice
When developing T&Cs, try to envisage everything that could go wrong if you had a really awkward customer and specify what you would do to resolve the issue in each situation. Try to write in plain language that customers will find accessible.
The customer should be made aware of your T&Cs and have a chance to agree to them before the job starts.
Blindly copying other businesses’ terms is generally a bad idea, partly as they may not be appropriate for your own, there is also no guarantee that they have consulted a good lawyer themselves.
Alternatively, you may be able to get standard legal templates from an industry relevant body or else websites that offer legal templates such as Clickdocs. It is however best practice to run your T&Cs past a solicitor to ensure they are appropriate.
BRAVE’s next Starting in Business workshop in Bristol on the 12th of September is aimed at those who have thoroughly researched their business idea and are ready to launch. To book your place click on the workshop link below or call 0117 944 5330.