Contract law is the basis of all business activity, whether you trade in goods or services. The law applies to your purchases from a small shopkeeper or the multi-billion deals made between multi-national companies.
Legislation can fill in the gaps in contracts with statutory implied terms, such as the Sale of Goods Act, or offer protection to the vulnerable, for example through the Consumer Credit Act governing the provision of credit.
With the freedom to sign a contract comes the ability to make a bad deal. Sorting out the disputes that arise as a result of business deals turned sour is, I suppose, one way for lawyers to make a living.
But a detailed, written contract that suits both parties is less likely to come a cropper than a handshake and a scribbled note on the back of an invoice.
This is where terms and conditions come in. We last wrote about ‘Ts & Cs’ in this blogpost in May 2013, and the advice offered there still stands. But I thought it was worth jotting down a reminder after recently turning away some business, when a potential client wanted to excise big chunks of my standard terms.
In my view, Ts & Cs exist to protect both parties to a business agreement, by creating a clear understanding of what is and is not provided in a B2B contract, any guarantees of delivery or quality, and arrangements for payment. While there can be some flexibility to tailor a contract to specific circumstances and client requirements, it is a deal breaker if you are asked to agree to a bad contract.
If you haven’t, as a small- or medium-sized enterprise, reviewed your standard terms & conditions for a year or two, then it’s worth dusting them down and considering whether they remain fit for purpose. Do they specify delivery times or quality thresholds? Do they reflect changes to the goods or services you provide?
Has domestic or European legislation altered the statutory basis on which you do business? The forthcoming changes to regulation of the collections industry will certainly provide an opportunity for businesses in my own field to review their standard terms.
A secure contractual basis to your business dealings leaves you free to build a profitable relationship with your clients, and to concentrate on providing the goods or services you supply to the best of your ability.
If you need help getting the right Ts and Cs for your business, SJ Collections can put you in touch with a legal expert on contracts.