Why do I need terms and conditions (T&Cs)?
A private company limited by shares that provides goods or services should have terms and conditions (T&Cs) for several important legal, operational, and customer relations reasons. These T&Cs set clear guidelines for the company’s operations, outline the rights and obligations of both the company and its customers and clients, while also providing legal protection to the Company.
Risk Management
T&Cs are vital for protecting the company from legal risks associated with the supply of goods and/or services. They help limit the company’s liability in certain situations such as if goods are defective, delivery is later or there is a breach of contract. This can reduce the risk of costly lawsuits or disputes.
Defining the company’s obligations and the customer’s rights, such as what is expected of both parties in terms of payment, delivery, warranties and returns. Without clear terms, misunderstandings or disagreements could arise, leading to disputes that could escalate into legal action.
Clear Expectations for Customers
Well drafted T&Cs can provide clarity to customers about what they can expect from the company. Customers will know the terms of delivery, the return policy and what to do if they are unhappy with a product or service.
This in turn helps build trust between the company and its customers and demonstrates professionalism and that the company takes its legal obligations and relationships with customers seriously. Customers can be safe assured they are dealing with legitimate and trustworthy business. This is even more important for a small or new business that is building its reputation and building customer loyalty.
T&Cs should specify payment methods, deadlines, late fees, and any interest on overdue payments. This reduces the chances of payment disputes by making it clear when and how payments are due and the consequences of non-payment.
Setting Boundaries in Contractual Relationships
By clearly outlining what is included and excluded from the service or product offered, T&Cs can prevent customers from expecting services or features that were not agreed upon. This prevents confusion and ensures customers understand what they are receiving, and if additional features or services incur extra charges.
It is also useful for T&Cs to include a force majeure clause. This protects the company in case of unforeseen events, such as natural disasters, which would prevent the company from fulfilling its contractual obligations. The force majeure clause would limit the company’s liability if the service or delivery cannot proceed due to the unforeseen event outside the company’s control.
Adapting to Change
T&Cs can be updated as the business grows, changes its operations, or responds to changes in law or industry standards. This flexibility allows the business to adapt its policies without renegotiating individual agreements with each of its customers.
Similarly, when introducing new products or services, the company can amend or add specific clauses to the T&Cs to address unique considerations such as special warranties, updated service levels or delivery schedules for new offerings without the need for brand new contracts.
For more details on how we can support you or your business, contact our Corporate and Commercial Law team today.
Client Case Study
Selling a company after 38 years
and why we chose HSR Law.
Client Case Study
The share-sale of a company
to an American buyer.
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