Terms and Conditions - The Basics

Terms and Conditions effectively sets out the terms you are offering to your Customer and helps the contractual parties to understand their duties, rights, roles and responsibilities. It is correct to say a Contract can be verbal only. However, if a dispute arises, it is then a question of a ‘he said, she said’ situation in a court arena. Then it is down to a Judge to decide. This is incredibly risky.

By having your terms set out in writing, it provides protection. It also allows for terms that can never be implied in a verbal contract. For example, what is called a ‘retention of title’ clause. This means if a Customer has not paid for the materials, you have right to remove them, as ownership of those materials does not pass until payment has been received.

It also ensures both parties know where they stand. Check out our Article – 5 Reasons why you should have Terms and Conditions.

What Key Terms

Key Terms include:

Definitions

Performance of the Contract

Price

Payment Terms

Liability

Non-Delivery/Defective Goods

Risk and Retention of Title

Confidentiality

Jurisdiction


What do these mean?

Definitions

This sets out key words in the document e.g. Supplier i.e. you and Customer; Goods, Services to name a couple of basic ones.

Price

We recommend alongside the Terms and Conditions you have a Specification Schedule or Quotation which sets out the specifics of the job or project including a detailed description and the Price, breaking down the materials and labour costs.

Payment Terms

This details when payment of the Contract Price is due. For example, you may wish to take a deposit before commencing any work. This is also where you can include any penalty fees for failing to pay on time.

Performance of the Contract

This sets out the conditions of the performance of the Contract for example conditions of delivery of goods and services and consequences if the Customer fails to accept delivery.

Non-Delivery/Defective Goods

This details the requirements of you and the Customer if the Goods or Services are defective or are not delivered within the time frame set out in the Specification Schedule. This can include requirements to notify within set times and even remove liability to you completely.

Liability

This sets out any exclusion of liability, i.e. being legally responsible. However, you cannot legally limit liability for death or personal injury. Usually, any liability under the Contract is limited to the value of the Contract i.e. the Contract Price.

Risk and Retention of Title

This sets out when risk for the goods and services passes, e.g. risk for damage and loss. It also allows for the ability to remove goods supplied and installed that have not been paid for by the Customer.

Confidentiality

This allows for the terms and conditions of the Contract to remain confidential.

Jurisdiction

This sets out what legal jurisdiction deals with any disputes. Usually the courts of England and Wales. It is not uncommon in extensive construction contracts that Arbitration is a means of resolving any disputes.


This is by no means an exclusive list of key terms and is only a basic outline. The purpose is show the importance of Terms and Conditions. It is an opportunity to control the consequences of certain actions. Terms and Conditions can be either be based around your Customer or around you. If no Terms and Conditions are in place, then it is highly likely a court will be more for the Customer.

Please note, any Terms and Conditions must also not be deemed unfair under the Unfair Contract Terms Act 1977. We do not advise drafting your own Terms and Conditions. Always seek the advice from a solicitor. Nothing beats bespoke Terms and Conditions.