What Should You Consider When Reviewing Your Business’ Terms and Conditions?

By Katie Harris

Trainee Solicitor

Terms and conditions regulate the business relationship between you and your customer. They set out the terms under which you must supply the goods and services. It is important to regularly review your terms and conditions to ensure that they reflect the current requirements of your business. A good place to start is with the following provisions

1. Goods and Services

Your terms and conditions should set out the scope of work, including the products and/or services you will be providing. These products and services should be described in detail or by reference to your website.

2. Price

Your pricing provisions should be clear and concise to avoid misinterpretation and disputes with customers arising. Since information on pricing is variable from time to time, it is good practice to put this information in a separate schedule. You should set out any conditions under which you may alter the price as well as how you would tell the customer about the change.

3. Payment

Your terms and conditions should specify how payment is to be made and when it will fall due, as well as what will happen in the event of non-payment or late payment. For the supply of goods, it is important to consider a retention of title clause which allows you to recover the goods if the customer defaults on payment.

4. Insurance

The provision of some services may require professional indemnity or another form of insurance to protect customers. It is important to put in place a suitable policy and to highlight that insurance is carried in your terms and conditions.

5. Termination

You should consider how long the contract will last for and what might trigger early termination. You may wish to specify whether there will be any penalties imposed for services not performed or goods not yet delivered.

6. Limitation of liability

The purpose of a limitation of liability provision is to limit the damages that you have to pay to the customer if you do not provide the services as advertised or if the products are defective.  

7. Intellectual property rights protection

It is important to take measures to protect your intellectual property (IP) rights. IP includes intangible rights such as trademarks, copyright, patents and designs. The IP clause should protect your pre-existing IP and confirm who will own the IP in any work created. If you are retaining the IP in any created works, you will need to grant the customer a limited licence to use that IP for business purposes.

8. Statutory rights and consumer protection

Customers, particularly individual customers, have statutory rights, including rights to terminate and rights to return or reject goods. You cannot use your terms and conditions to contract out of these rights. If you do, there is a risk that the entirety of the terms and conditions will be considered void.

The above is not intended to be an exhaustive list and it is important to tailor your terms and conditions to your business needs.

If you would like us to assist with reviewing or drafting your terms and conditions, please contact our Corporate and Commercial Team on 0345 646 0406 or fill in our online enquiry form for more information and a member of our team will be happy to assist.