Terms & Conditions
For many entrepreneurs and start-up businesses written terms and conditions (T&Cs) with their customers are not high on the priority list in the early days of trading. The focus is instead on finding premises, getting products market ready, seeking customers and launching marketing initiatives.
However, neglecting the less sexy part of your business, including T&Cs, can have serious implications on your cash flow. In a worst-case scenario, you could end up spending a significant amount of time chasing unpaid debts, resolving disputes and enduring sleepless nights and stress. Worse still, you could also spend lots of money on debt collection and legal costs or having to write off bad debts.
Protect your business
If you don't have written terms and conditions, you risk of uncertainty and misunderstandings. It's important to establish the arrangement with your client, so they have no opportunity to go back on their word. If there is nothing in writing there is no proof, however, if the terms are in writing, it is evidence you can produce before a court if you need to.
What should T&Cs include?
Well-drafted T&Cs should provide clarity on what should happen in any given situation. They should set out the agreed terms and, more importantly, what happens if things go wrong. The exact content for your T&Cs will depend upon your business, but here are some elements to consider:
- A clear outline of what products or services you will be providing
- What the payment terms are and the consequences if payment is not made
- What guarantees or warranties will be in place
- Timeframes for delivery
- What happens if either party doesn't deliver their side of the agreement
- The term of the agreement and what notice is required by either party wishes to end the agreement
- Which law shall govern the contract
One size doesn't fit all
It's important to make sure your T&Cs are customised for your business. You can't assume another business will have the same needs as yours. Likewise, you should avoid the temptation to copy someone else's terms because they may not have consulted a lawyer themselves.
In short, do not cut corners. Spending some money up front to draft proper T&Cs can potentially save you significant headaches and legal costs down the track. Engage a lawyer early in the process - it is a crucial means of protecting your business and its cash flow.
If you would like to enquire about having your terms & conditions reviewed or having a new set drafted, please call us on 03 9629 8777 or click here to be directed to our ‘Contact Us’ page.