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How important are your terms and conditions? When you should you update them?

Written by Clive Rich on Monday, 18 July 2022. Posted in Commercial law, Legal

The terms and conditions of a business are like a smartphone’s operating system. To keep a smartphone running at its optimum level you need to regularly update its operating software.

How important are your terms and conditions? When you should you update them?

The terms and conditions of a business are like a smartphone’s operating system. To keep a smartphone running at its optimum level you need to regularly update its operating software. Not doing so can leave your phone open to bugs, loss of data and even data breaches.

If you’re not keeping your terms and conditions up to date you are also leaving your business exposed to a large amount of risk.

It’s often the case that many businesses are focused on serving their customers or managing operations, so Terms and Conditions become a bit of an afterthought. A clear set of regularly updated Terms and Conditions is vital to ensure you have grounds to properly manage disputes, protect your interests and ensure you’re being compliant with UK consumer rights.

Managing disputes

The importance of terms and conditions comes to the forefront when there is a dispute with a customer.

A business needs to have these to clearly set out the terms upon which it wishes to conduct its business. The aim is to avoid any misunderstanding with the customer as to what exactly the business is settling or providing.

Terms and conditions provide a legal basis between the business and the customer in the form of a binding contract. Each set of terms and conditions are bespoke to an individual business and it is unlikely that two businesses will have the same set

What should be included in your terms and conditions

Terms and conditions are essential for a business as they ensure that the contract covers all the main areas between the business and the customer. 

The terms will set out all of the relevant commercial elements such as the price of the goods or services the business is selling, how these goods and services are to be delivered and how payment is to be made.  

There is also a provision in the terms and conditions for when things don’t go entirely to plan. They are a way for a business to seek to limit its liability to customers and set out exactly who will be responsible in the event that the goods or services are delayed or not delivered to the customer.

Other provisions

More fundamental aspects of a business are also protected by terms and conditions. 

A business’ DNA – its intellectual property, is protected by the terms and conditions a business has in place. In the case of the sale of goods, the Terms and Conditions will set out when the ownership of the goods passes to the customer and who carries this risk whilst the goods are being delivered.

In circumstances where a business has been let down by one of its suppliers, terms and conditions are vital as they assist in establishing who is at fault for any breach of contract. Clearly drafted terms and conditions will help a business owner to enforce the terms against a defaulting party such as a supplier or a non-paying customer.

The terms and conditions also set out circumstances in which the contract between the business and the customer or supplier can be terminated. In the event that a supplier is consistently failing to supply the goods to a business, the Terms and Conditions will set out the procedure by which the parties terminate their working relationship.

Improving customer experience

Terms and conditions can instil a sense of confidence in customers as they can see that the business has a clear set of terms that govern the provision of services or the sales of goods. A clear set of rules will also go some way in minimising any misunderstanding between the business and its customer as the relevant terms of business are clearly set out for the customer.

Investing in correctly drafted terms and conditions is a far better strategy to avoid disputes than not having them and then subsequently becoming embroiled in lengthy and expensive litigation in court.

Get legal assistance

The law is ever-evolving and changing. As such, it is essential for a business’ terms and conditions to be reviewed periodically every three to five years. If there is ever a major change in the way a business serves its customers, then this should also be grounds to update its Terms and Conditions. 

This will assist with changes in both the business as it grows and develops and also any changes in the law or sector that the business operates in.

About the Author

Clive Rich

Clive Rich

Clive Rich is the CEO and Founder of LawBite, a virtual legal platform that helps SMEs get easier access to expert legal advice that is clearer and more affordable. Clive is a former barrister and expert negotiator.

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