Why You Must Have Terms and Conditions
Introduction
Terms and Conditions form an essential part of any business Cheshire Cleaning Co are no exception. Terms and Conditions provide clarity about what should happen in any given situation. They set out the key commercial terms you are offering to your clients and helps the contractual parties to understand their duties, rights, roles and responsibilities.
There is always lots to do when you are trying to run your business. Writing Terms and Conditions usually fall to the bottom of the priority list. Whether you are a start-up or an established business, now more than ever, a robust set of Terms and Conditions is essential and avoids any misunderstanding about what you are selling and the terms on which you are selling it.
Your Terms and Conditions establish a legally binding contract between you and your clients. Your Terms and Conditions must be written specifically for your business. No two businesses are the same because another business may not have the exact needs as your own. So it’s recommended to engage with a legal professional to write these for you – don’t copy and paste from a website.
Why You Must Have Terms and Conditions
Your Terms and Conditions will cover commercial terms such as price, delivery and payment terms. They go a little further than that by limiting your liability, disclaiming your liability for failure or delay caused by Force Majeure events, protecting your intellectual property rights and the passing of title and risk.
Why You Must Have Terms and Conditions
If you have a clear set of Terms and Conditions, it is much easier to establish where there has been a breach of contract. Written contracts provide certainty and are much easier to enforce should you need to.
If you have a robust set of Terms and Conditions, the change of a legal dispute is minimised. It is much cheaper to have a set of Terms and Conditions prepared than to be involved in lengthy and costly litigation.
Compliance
There may be specific regulations that apply to your industry and you may refer to them in your Terms and Conditions. Having a set of Terms and Conditions helps ensure compliance with legal obligations.
Clarity
Terms and Conditions provide clarity about what should happen in any given situation. They set out the key commercial terms you are offering to your clients and helps the contractual parties to understand their duties, rights, roles and responsibilities.
Consistency
Having a clear set of Terms and Conditions helps you to deliver a consistently great level of service. There are no surprises or arguments as the terms and conditions ensure that there is no ambiguity and your terms and transparent from the day your business goes live. Having a set of Terms and Conditions helps you to manage your client’s expectations at all times meaning you can both refer back to them and you are not left with clients that may have misunderstood or be disgruntled because their needs have not been met.
Basic Principles of English Contract Law
A contract is a legally binding agreement between at least two parties. The basic principles of formation of the contract govern the formation of all contracts, whether you:
- buy or sell services
- sell a product
- sell a business
- buy intellectual property
- sell products to consumers
- give a guarantee
Some contracts must be in writing to be enforceable. Most do not as they can be verbal.
Some organisations make the mistake that if there is no written contract, there cannot be a contract.
The basic principles of contract law apply to oral contracts as well, and those formed by the conduct of the parties.
Elements of a contract
To make a legally binding contract these five elements must be satisfied: offer, acceptance, consideration, intention and capacity.
- Offer: One party makes an offer.
- Acceptance: The other party accepts the offer.
- Consideration: Each party provides consideration to the other. Consideration can be:
- a promise to pay money.
- a promise to do something.
- a promise not to do something, or
- promise to provide something else of value. That doesn’t mean it needs to be valuable. £1 could be valuable consideration and it doesn’t have to be of financial value.
- Intention to be legally bound: Both parties have an intention to be legally bound by the agreement (which is proposed by the offer, and then accepted).
- The parties have contractual capacity: The parties are legal entities recognised by law, such as companies, limited liability partnerships and individuals of at least 18 years of age.
Once these elements exist, you have a legally binding contract.
The form of communication used to make the contract is irrelevant, other than where statutory requirements dictate that to be enforceable, it must satisfy the prerequisites above.
