How to make sure your standard terms and conditions are part of the contract with your customer
March 22, 2017
There are some fundamental ways so as to ensure that your business standard terms and conditions are incorporated in your contracts and agreements with your customers. Remember, standard terms and conditions cover matters such as price, delivery, standard of service and liability. They are the fundamental part of a contract with your customers.
How to incorporate them?
It is essential that your standard terms and conditions (T&Cs) are brought to the attention of your customers if they are to be effectively incorporated into a contract. T&Cs often appear on the back of an order form and can easily be overlooked.
Standard form contracts may not be signed, resulting in the customer claiming insufficient awareness of the term that they would have rejected if they had knowledge of it. The risk you have here is that the Court will find the T&Cs were not incorporated into the agreement and cannot be relied upon. Therefore you must ensure that:-
- The T&Cs are given to the customer at the time the contract is formed;
- Your customer’s attention is drawn to the T&Cs in writing or on the face of the document;
- Reasonable steps are taken to highlight particularly onerous T&Cs; and
- The other party signs the T&Cs as evidence of acceptance.
Faxes, PDFs etc
A particular issue arising in respect of faxing order forms when the T&Cs are on the reverse of the order form. This issue can also arise when sending T&Cs by PDF (for example attached to an email). Avoid these pitfalls by:-
- Putting the T&Cs on the front page;
- Copy the T&Cs and fax them (or as the case may be, email them) with the order form;
- Make reference on the front of the order form and the T&Cs are on the reverse;
- Make reference on the order form that the contract is formed subject to the standard T&Cs; or
- Make the other party aware that T&Cs apply and where a copy of them can be found e.g. on a website or on request.
To ensure effective incorporation of T&Cs, it is crucial that both parties are aware of the prevailing T&Cs at the time the contract is created. In the past, businesses have sought to incorporate terms relating to payment on the reverse of an invoice, but have not been successful. To ensure the appropriate T&Cs are incorporated, bring them clearly to the attention of the other party at contract formation.
The information contained in this article is intended for general guidance only. It provides useful information but it is not a substitute for obtaining legal advice as the articles do not take into account specific circumstances. So do please Contact US for legal advice on the issues raised.