What are Terms and Conditions?
Commonly called T’s and C’s these are the contractual requirements or obligations which your customer must agree to when using your service.
Why are Terms and Conditions important to your business?
Your T’s and C’s govern your dealings with your customer and you need them to be as effective as possible to ensure they work for you.
Effective T’s and C’s may deter customers from paying you late.
When should I give my customer my Terms and Conditions?
Your T’s and C’s must be incorporated into your contract with your customer and it is good practice to ask for it to be signed and returned to you prior to commencing work for them. This is proof they have received them and confirms they accept them.
NB:- Sending T’s and C’s with your invoice is too late – it is post contractual i.e – after the event. At this point your contract may already be formed.
What sort of information should I include in my T’s and C’s?
Your Terms and Conditions should be personal to your business. Each business will have different issues that the Terms should address, however, standard clauses that should be included are:-
- Your obligations to your customer and vice versa
- Time for delivery
- Charges and expenses
- Payment terms
- Insurance details, if any
- Termination of contract details
Other issues that should be considered are:-
- A clause to reclaim your legal costs and expenses incurred in having to pursue your debts
- Late payment charges
- Interest and compensation
- Retention of Title
Can I claim Late Payment Interest?
Yes you can, as long as your Terms and Conditions do not include payment at a contractual rate. These are usually expressed as a percentage over a bank rate.
As bank base rates are so low at the moment claiming Late Payment Interest is usually more profitable.
What does a ‘Retention of Title’ clause do?
If you have supplied goods that your customer has not paid for, this clause gives you the authority to recover them.
What should I do if I am in a contract with my customer to supply goods and I am not getting paid?
Your T’s and C’s should include a clause that states that if your invoices are not paid within the due period not only will you stop supplying your customer but all invoices will immediately become due and payable.
This will enable you to claim all your invoices at the same time which will save time, money and legal costs.
Anything else that I should consider?
- You can never refer to your T’s and C’s too many times, include them on your estimates, quotations, order acknowledgments, delivery notes and invoices, to remind your customer of the terms on which you are doing business.
- Be careful! Make sure you do not inadvertently contract on your customer’s Terms as you may be agreeing to something which disadvantages you.
Can I write my own Terms and Conditions?
Bespoke Terms and Conditions that reflect your business ensures that if something goes wrong with your client you have a solid basis if legal action is required.