It is crucial for any business that its customers are aware of the terms & conditions on which that business trades. A well drafted set of terms & conditions can protect your business having to argue issues such as late or non-payment for goods and/or services, which in turn assists with maintaining a healthy cash flow.
It is often only when a dispute arises that businesses either realise that they do not have a set of terms & conditions to rely on or that the terms & conditions currently in place are not up to date. Taking as just one example of many the level of interest payable as a penalty for late payment, the Late Payment of Commercial Debts (Interest) Act 1998 and subsequent 2002 Regulations do set out the level of late payment interest that may be demanded by businesses. Businesses should ensure that the penalty interest rate in the terms & conditions is not lower than the statutory rate as the rate specified in the terms & conditions will take precedence and this will leave your business only being able to recover the lesser level of interest.
It is also crucial that the terms & conditions for your business are incorporated and therefore take precedence over any previous terms & conditions. They will not legally bind your customers unless your customers have been informed that those terms & conditions will apply to the contract entered into. Furthermore, after a contract has been offered and accepted by the parties, new terms & conditions can only be introduced by mutual consent.
Commercial Solicitor, Karen Worth, regulalry drafts terms & conditions for Frettens clients; she says “There are some practical procedures that any company can follow to ensure that their business is adequately protected. Firstly you should make sure that the terms & conditions you are relying on are up to date with current legislation and provide the relevant protection for your business. You should also ensure that your terms & conditions are brought to the attention of your customers as soon as possible. This is usually done by printing them on invoices, marketing material, quotation forms and order acknowledgements.”
If you have any queries about your terms & conditions or consider that they may need updating, feel free to contact our experienced Commercial Team who will be happy to review your current terms & conditions for free and advise you if anything ought to be updated.