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Is your terms and conditions are not incorporated?

22nd November 2010
By Robert Mark in Business Law
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Business Terms and Conditions
Setting terms and conditions in any business are very crucial for an indelible relation. This article highlights the importance of proper terms and conditions in business.

Business Terms and Conditions
A business contract of terms and conditions is an agreement between two parties that might be written down, verbally agreed, implied, or a mixture of all of them. Even if you do not issue a written contract at first, it is certainly a good idea to write one when dealing with suppliers, customers or employees, as it may prevent disagreements arising later on. In some instances, a written contract is required by law.

Setting Terms and Conditions of Contract
Terms and conditions - sometimes known as terms of trade - are the terms of the contract between you and your customers. They're designed to protect your rights, limit your liabilities and provide you with some security when you sell your goods or provide a service.

Many businesses supply goods and services on the basis of informal, verbal arrangements. However, there is less chance of a dispute arising if agreements are clearly set out in writing.

It's important to get your terms and conditions right. If they're inadequate, it can be difficult to pursue or prevent bad debt.

Problem in Writing Terms and Conditions
Writing terms and conditions is a difficult and perhaps tedious job. But it is important to protect your business to retain goodwill and to avoid losing customers through misunderstandings.

Businesses often give their standard terms and conditions of business low priority until a dispute arises by which time it may be too late. It is not uncommon for a sales department to issue quotations or accept orders using either terms that are out of date, copied from the internet or even be conducting business on the customer’s terms because the customer has successfully substituted their own terms and conditions for yours.

If terms and conditions are well written this can prevent misunderstandings, lost customers and avoid unexpected legal costs in future.

Incorporation of Terms & Conditions
Terms & Conditions will be useless unless proper procedures are followed to ensure they are incorporated and prevail over any competing terms and conditions. They will not bind your customers unless they have been incorporated.

The common law rule is that after a contract has been formed by offer and acceptance between the parties, new contract terms cannot be introduced (unless by mutual consent). Therefore the all too frequent business practice of sellers seeking to impose their terms and conditions by printing them on the back of their invoices will not be sufficient to incorporate their terms and conditions into the contract, as invoices are traditionally dispatched after the contract has been made.

What if your Terms and Conditions are not incorporated?
Clearly there is some form of agreement between you and your customer. If a Court does not accept that the transaction was conducted on your terms and conditions (and there are no other express terms) it will imply terms into the agreement on the basis of an inference that the parties must have intended such terms to be incorporated. They will do this where:-
• it is necessary to give business efficacy to the contract so that even though the terms seem complete, there is something without which the contract will not be able to work in the way it was intended (for example, you sell apples to a bakery and they pay you an agreed sum. There would be an implied term that the apples not be rotten);
• the implied term represents an obvious (but unexpressed) intention of the parties. Courts will be slow to imply terms where two commercially mature parties have entered into a detailed written contract but will be more forgiving where there are no written terms at all (for example, where the Court is not satisfied that your terms and conditions have been incorporated but that your customer is not relying on theirs);
• it is implied through custom. There must be an invariable, certain and general custom of a particular trade or place; or
• it is implied through a previous course of dealing. Where you and your customer have dealt with each other previously on similar contracts and consistently gone about things in a certain way, the Court will be prepared to imply a term relating to that previous course of dealings if there is no express term in the current contract.

It is, of course, far better to be able to rely on your Terms & Conditions rather than having to waste the time and expense of trying to persuade a Court to imply a term into the agreement between you and your customer. You will be able to put far more into your terms and conditions than a Court would ever imply.

Practical Tips to make sure you do Business on your Terms
• Ensure your Terms & Conditions are brought to your customer’s attention at the earliest opportunity. Consider setting out your terms in your brochures, catalogues or other marketing material, on your quotation forms and on your acknowledgement of order.
• Put your terms and conditions on your invoices – if there is a course of dealing, this will assist your argument that your terms and conditions had been brought to your customer’s attention over time.
• Train your sales staff in your procedures; ensure they have at least a basic working knowledge of the rules of contract formation (offer and acceptance) and the ‘battle of the forms’.
• Get your Terms & Conditions in first and last!

What do Terms and Conditions should cover?
Your terms and conditions should cover:
• Costs.
• Delivery arrangements.
• Payment terms. Is it full or part payment in advance or payment in arrears? You could offer customers a discount for paying by the due date and/or for paying within, for example, seven days of the invoice date.
• Credit limits and credit periods. If you don't agree a credit period with your customers, the law sets a default period of 30 days.
• Your right to charge interest on late payments and claim compensation for debt recovery costs.
• A commitment to quality.
• Data protection.

Why Net Lawman Terms and Conditions Templates
Net lawman has a largest selection of terms and conditions templates of various businesses. Our templates are regularly up-dated by expert team of Solicitors and Barristers which comply with relevant legislation. By using our templates you will be able to protect your position in all contracts.

If you are starting a business our templates of business terms and conditions is an easy, cost effective method of getting this job done.

Terms and Conditions - Partnership Agreement - Terms and Conditions of Contract

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