Terms and conditions form a basic but vital part of any business transaction.

Whether you sell to other busineses (B2B) or direct to the public (B2C), your terms and conditions are there to protect your rights, limit your liabilities and provide you with some security when you sell your goods or provide a service.

Sadly, many companies enter into informal, oral arrangements, either through ignorance or in a misguided attempt to save money. Disputes then arise which could have been avoided if there had been clearly written terms from the start.

Key clauses for standard terms and conditions:

  • Price of goods and/or services
  • Arrangements for delivery
  • Payment terms – if you don’t agree a credit period with your customers the law sets a default period of 30 days
  • The right to charge interest on late-payments and claim compensation for debt-recovery costs
  • Quality of goods and/or services
  • Returns
  • Liability cap

In order for your terms to be binding, you need to make your customer aware of, and agree to, your terms of trade. This needs to be evidenced by getting them to sign up to your terms before providing them with the goods or services.

In order to be effective, the contents of your terms and conditions need to reflect who you sell your goods or services to and on what basis. Whether or not you supply to other businesses or to consumers direct will affect which aspects need to be covered in your terms and conditions. Below are the most common senarios:

Business to Business (B2B) Goods & Services

Sale of Goods (Quotation)
Sale of Goods (Purchase Order)
Supply of Services (Proposal)
Supply of Services (Purchase Order)

Business to Consumer (B2C) Goods & Services

Sale of Goods (Quotation)
Sale of Goods (Purchase Order)
Supply of Services (Proposal)
Supply of Services (Purchase Order)

Most companies are able to use one of the terms and conditions above in their normal course of business. Others may have different terms for different transactions, or may combine documents for simplicity of implementation.

E-commerce – a word of warning

If you make transactions with your customers electronically, you still need to remember to include your terms and conditions. For those selling goods and services over the internet, you should have terms and conditions specifically written for your website.