When selling goods or services to the public, having clear Terms and Conditions (T&Cs) in place is essential. T&Cs provide both businesses and customers with a transparent framework, setting out the rights and responsibilities of each party. They help to prevent misunderstandings, reduce disputes, and ensure compliance with legal obligations. This article explains the importance of T&Cs, what they should include, and how they protect your business.
The Purpose of Terms and Conditions in Law
T&Cs serve as the legal foundation of a transaction, defining the terms under which a product or service is offered. They provide clarity on matters such as pricing, payment terms, liability, and dispute resolution. Properly drafted T&Cs help businesses comply with consumer protection laws, such as the Consumer Rights Act 2015, and provide legal recourse in the event of a dispute. By ensuring that customers accept the T&Cs before completing a transaction, businesses can better protect their interests.
What Should You Include in Your T&Cs?
- Identifying Your Business
Your T&Cs should clearly state who the contracting party is:
- Business name
- Registered company number and registered office address (if applicable)
- Contact address and details (email, phone number, etc.)
- When Does a Contract Come into Existence?
A legally binding contract is formed when an offer is accepted under agreed terms. Key considerations include:
- Offer and acceptance: Define when a customer’s order becomes binding.
- Whose terms apply: Ensure that your terms prevail over any conflicting customer terms.
- Incorporation of terms: Make sure customers have a reasonable opportunity to read and accept your T&Cs before entering into a contract.
- What Product/Services Are Being Provided?
Clarify the product / scope of the services being offered, including:
- What is included and excluded from the product/service
- Any restrictions (e.g., hours of access, usage limits)
- Availability of additional products/services and associated costs
- Standards applicable to the product/services supplied
- Customer Obligations
Set out expectations of your customers, such as:
- Any requirements in relation to delivery/collection
- Maintenance of items and reporting of issues
- Insurance requirements
- Expected behaviour (e.g., compliance with applicable policies)
- Obligation to keep contact details updated
- Charges and Payment
Clearly define the financial terms, including:
- Charging rates and conditions for price increases
- When and how payments must be made
- Business rights concerning unpaid charges, including lien (retaining possession of goods until payment is made)
- Termination
Explain how the agreement can be ended:
- Whether the contract is fixed-term or rolling
- Rights to immediate termination in cases of breach
- Customer obligations upon termination (e.g., removing stored goods by a deadline)
- Other Terms
Include provisions for:
- Data protection (with a reference to a separate privacy notice)
- How terms can be varied
- Force majeure (unforeseen circumstances preventing contract fulfilment)
- General provisions such as governing law and dispute resolution
What Information Should You Collect from Customers?
Only gather information necessary for providing your product or service and ensure that customer information is kept up to date and in compliance with data protection regulations. It is important to have a privacy notice which is provided to customers and explains what data you collect, how and why and what you do with it.
Distance Selling Regulations
If you sell goods or services online or via telephone, your business must comply with the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. These regulations set out:
- Pre-contract information: Customers must receive clear details on pricing, delivery, cancellation rights, and the nature of the goods or services before making a purchase.
- Right to cancel: Consumers have a statutory right to cancel most distance contracts within 14 days without giving a reason (exceptions apply to certain products and services).
- Refund policies: Businesses must issue refunds within 14 days of cancellation if applicable, including delivery costs.
- Delivery obligations: Goods must be delivered within 30 days unless otherwise agreed. If this is not met, customers are entitled to a refund.
- Digital content: If selling digital products, businesses must ensure customers acknowledge that they lose their right to cancel once the download begins.
Failure to comply with these regulations can result in penalties and legal disputes, so it is vital to ensure your T&Cs reflect these legal requirements.
Speak to Our Experts
Ensuring that your business has well-drafted Terms and Conditions is crucial for legal protection and customer transparency. The DTM Legal Corporate & Commercial team can assist you in drafting bespoke T&Cs tailored to your business needs. Contact us today to discuss how we can help you safeguard your business.
