Terms And Conditions: FAQ
Terms and Conditions are a crucial aspect of any business contract or relationship. Terms and Conditions regulate the relationship between businesses and consumers, suppliers, businesses and other businesses, etc. They are often called Terms of Service or Terms of Agreement and can be found in fine print at the bottom of a contract or a website.
Nowadays, it is virtually impossible to conduct a business without having some form of Terms and Conditions. In the event of contractual or legal disputes, a business’ terms and conditions are often the first points of reference. Certain statutes also impose and imply contractual terms into consumer and business contracts.
So as a startup or SME, it is extremely important to have a good set of Terms and Conditions drafted.
Why Are Terms And Conditions Important?
Although it is not mandatory for a business to have Terms and Conditions, it is in your best interest to do so, because Terms and Conditions help:
- Limit legal risk and liability
- Minimise the likelihood of legal disputes
- Prevent parties from paying unwanted penalties
- Protect intellectual property rights
- Clearly outline parties rights and obligations
- Ensure compliance with relevant laws and regulations
It is also important for a business to have their Terms and Conditions drafted by a legal professional because they will help reduce uncertainty, identify risks, and ensure the Terms and Conditions are commercially advantageous. when contracting with other businesses and consumers and are a good form of risk management. Sadly most businesses do not consider Terms and Conditions until they have to rely on them in legal disputes. At which point, it is often too late.
Are Terms And Conditions Legally Required?
There is no general legal requirement for a business to have Terms and Conditions. It is up to the individual business or startup to decide whether or not they want to have them. However, there are a few instances where certain Terms and Conditions are legally implied in contracts.
1. Sale of Goods
When it comes to the sale of goods, the Sale of Good Act (SGA) 1979 automatically implies terms about the quality and title of goods sold in the course of a business into all contracts. Also, the Consumer Right Act (CRA) 2015, treats every contract to supply goods as including a term that the goods are of satisfactory quality and come as described. If you do not have any Terms and Conditions or have Terms and Conditions that do not include these essential terms, you might be vulnerable to legal liability.
2. Supply of Digital Content
When it comes to the supply of digital content, the CRA 2015 also treats every contract to supply digital content to a consumer as including a term that the goods are of satisfactory quality and come as described.
What Types Of Terms And Conditions Cannot Be Used?
According to the Unfair Contract Terms Act (UCTA) 1977, you cannot exclude or restrict liability for death or personal injury resulting from negligence. The CRA 2015 also states that a contract to supply digital content to cannot restrict or exclude the trader’s liability. So be sure to keep this in mind when creating your business’ Terms and Conditions.
What Are Elements Of Good Terms And Conditions?
Ideally, good Terms and Conditions should include:
- A clear definition of the obligations of each party
- Price and payment terms
- Product specifications (if any)
- Timelines for Delivery
- Liability for defective services or breach of contract
With a well-defined set of Terms and Conditions, startups and SMEs are better able to protect themselves from unnecessary lawsuits, enforce their rights against contract violators and comply with relevant legislation.
Should I Use Terms And Conditions Templates?
It is generally not advisable to use Terms and Conditions templates because they may be relevant to your business or adequately protect your business interests. You also should not use Terms and Conditions templates, because the types of Terms and Conditions you may need will vary for customers and suppliers. More importantly, you have no guarantee that that individual who drafted the template is: a) a legal professional or b) is familiar with your business.
While using Terms and Conditions templates can be tempting, it is often better to seek professional legal advice or assistance. If you need detailed, expert, and affordable Terms and Conditions for your business or website then give us a call on (+44) 0203 151 0011 or submit your enquiry and our legal team will be happy to book a free one-to-one consultation with you.
The information provided on this page does not constitute legal advice.