Is a standard set of terms and conditions advisable for a small business?

Question: I run a small successful service business but I do not have a standard set of terms and conditions.  Is this advisable?

Answer:  I think it is advisable for any business to have a standard set of terms and conditions.  If you are dealing primarily with consumers you are limited in what you can provide for in your standard set of terms and conditions.  There are certain rights which are guaranteed to consumers by legislation and there is also European law which makes any unreasonable terms unenforceable.  However, it is still better to have a standard set of terms and conditions particularly in a service industry where you may not always get your fee paid in advance.

Where the transaction is business to business, there is much more scope for tailoring the terms and conditions – for example it may be possible to substantially limit your liability if something goes wrong.  If you are doing a lot of work on a business to business basis it can often arise that both parties have their own standard terms and conditions.  In this event, it can sometimes be difficult to work out which terms and conditions apply and this is something to watch out for.  In disputes of this kind the courts will often look at the behaviour of each party and analyse the transaction in order to decide which party made the offer to contract and which party accepted the offer.  It would certainly be helpful to your case if you lay down clearly the conditions under which you are entering into an agreement and then follow those steps.  It is therefore important to regularly review your terms and conditions to ensure they reflect your current business practices and that they are legally effective.

The information contained in this article is for general information purposes only and does not constitute legal or other professional advice.  Specific legal advice should be sought on any particular matter.

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