Terms and Conditions of Trade

Why have standard Terms of Trade?

Many transactions, particularly low value retail sales, take place without recourse to written "terms and conditions". However, all sales made on credit and more complex dealings, will invariably benefit from the creation of your own carefully drafted terms and conditions of business.

Examples of the way in which your trading terms can benefit your business are as follows:

You can anticipate problems and prevent some of them from ever arising.
Credit control - specified payment terms and contractually binding remedies in the event of non-payment can be included.
You have a defined procedure for supplying goods or performing a service.
Less reliance can be placed on "implied" statutory terms that might otherwise operate to your disadvantage.
You can strengthen your own position and can to an extent and (subject to compliance with existing legislation) limit your customers bargaining power.
Risk and liability generally can be minimised.
You can deal promptly with any deviation from your own terms by the other party.

Key Points to Consider...

Are you aware that:

If you do not have you own terms of business you may end up trading with your customer on its trading terms, the terms of which will usually be unfavourable to you.
The lack of your own trading terms which specify limits of liability for your business may mean that your business will be more vulnerable in the event of a customer claim.
If you deal with foreign businesses English law may not apply to such dealings / contracts and one way to counteract this is to confirm the position in your own terms of business.
Your customer has rights under the Consumer Protection (Distance Selling) Regulations 2000, where they have a seven day cooling-off period to cancel an order. Your terms of business can seek to lessen the burden of these regulations.

Example Terms of Trading...

Would your business benefit from terms of business which deal with the following:

Passing of ownership and retention of title.
Description of goods.
Quality of goods supplied.
Statement when sale to be deemed effective.
Definition of price and what additional sums have to be paid.
Terms of payment.
Passing of risk / insurance liability.
Limitation of liability.
Protection of intellectual property rights.
Resolution of disputes.
International trading.
Time and method of performance.

Are your terms of business enforceable?

No matter how well they are drafted, your standard terms and conditions of business will be quite useless unless incorporated into the contract of sale. If they are not incorporated they will not be effective and will not form part of the terms on which you are trading with your client.

Are you aware: The terms of business printed on the back of your invoice may not be enforceable against your client?

That once an offer for goods has been accepted, terms subsequently brought to the attention of your customer will generally be of no effect?

How can warners help?

Warners can help to simplify the issues and advise your business on how to address any problems. In addition to assisting with the production of expertly drafted trading terms for your business we can advise on the procedures which should be followed to seek to ensure your terms of business are being incorporated into each contract with your customers.

For further information on how we can help you with these and other business issues please contact one of our company commercial lawyers