Most businesses have their own terms and conditions of trading.  These normally seek to give you rights if the other party defaults and afford you protection if a claim is made against you.  At best they will be of limited use if they are not reviewed and updated on a regular basis.  At worst, they are useless if they are not incorporated into your contract with the customer.

In simple terms, you need to make sure that the terms and conditions are part pf the contract that you make.  The clearest way is for them to be included in the physical contract document that is signed by the customer.

If the customer is important to your business operations you should consider a specific, bespoke written contract with that customer that sets out all the important points and includes the terms and conditions.

Further down the scale of importance, you could get the customer to sign up to your terms and conditions at the time they open and account with you and ensure that all your relevant documents have the terms and conditions on them.  This would include quotations, confirmation of orders, invoices and delivery notes.  If you are sending any of these by fax or email, do not forget to include the reverse page if that is where the terms and conditions are printed.

Be careful not to fall into the trap whereby the customer's own terms and conditions become incorporated into the contract in place of your own.  This can happen where you quote on your own terms and conditions and the customer "accepts" that quotation based on his own terms and conditions.  If their order goes ahead on this basis, you could be deemed to have accepted the customer's terms and conditions to the exclusion of your own.

Some key areas to consider for inclusion in your terms and conditions include:

• Limiting liability
• Quantifying loss by liquidated damages where possible, to prevent costly arguments on the level of the claim
• Allowing you to set off claims and losses against monies due to a customer or supplier
• Dispute resolution procedures

The lessons are simple:

• Keep your terms and conditions up to date
• If your customer is key, make a specific contract with him that incorporates your terms and conditions
• Otherwise, make sure that your terms and conditions are made part of the contract

We can help you by giving advice on these matters and training, tailored to your requirements, to all staff involved in the contract process within your business.

When in doubt please contact, Nicholas Carr