Trading Terms and Conditions: when should I get them?

If you sell goods or services in a particular trade or profession, whether it involves door-to-door selling, or the on-premises sale of hardware, software, membership facilities or something completely different, you will need standard trading terms to govern these transactions.

Why are they Important?

A whole host of laws, regulations and best practices govern the terms on which traders must do business with their customers. Trading terms and conditions must be fully compliant with these regulations and guidelines in order not to fall foul of the law. This also ensures that both parties are absolutely aware of their rights and obligations when they sign on the dotted line.

What are they / what should be included?

Where goods or services are being supplied to consumers, trading terms should be as consumer-friendly as possible and must legally contain certain prescribed information. This information, and other information typically included in such terms and conditions, is outlined below:
  • Company identity and contact details. This should include company name, type, trading address and VAT number at a minimum.
  • When do offer and acceptance take place? These are two of the key cornerstones for legal contract formation. Suppliers will want to ensure that supply of the goods/services takes place on their own terms rather than any terms put forward by the customer (to avoid what’s known as a “battle of the forms”) and must therefore expressly state that the order constitutes an offer, acceptance of which creates a binding contract.
  • May orders be changed and/or cancelled after they’ve been placed? If so, how and for what reason(s)?
  • What are the deliverables? In other words, what can the recipient of the goods/services expect to get for their money? This description should be as clear and unambiguous as possible and should clarify that descriptions and pictures in marketing materials are indicative only and do not form part of the contract.
  • What is the total price and are delivery charges included? Prices will be deemed to include VAT unless stated otherwise. Also, if quotations are given, the terms should state how long these remain valid for.
  • What are the payment and delivery arrangements? Any timings in relation to these should be clearly defined and suppliers may want to include a right to charge interest on late payments.
  • What warranties is the seller willing to give? With respect to goods, for example, these may include fitness for purpose, satisfactory quality and absence of defects. Where these warranties are not met, what are the consumer’s rights (e.g. repair, return, refund)?
  • What extent can the supplier limit its liability? In other words, consideration needs to be given to what will happen if the supplier is negligent or fails to deliver according to the terms. Can the customer sue them for all its losses or is are its remedies restricted?
  • Is there a complaints handling or returns policy?
  • How may either side end the contract? Suppliers should ensure that adequate notice is required to be given so that they can manage their costs and workflow.
Trading terms and conditions will need to be tailored depending not only on whether the goods/services are being supplied in a business-to-business or business-to-consumer setting, but also on the particularities of the industry in which the trader operates. For this reason, it is important to avoid a one-size-fits-all approach and get any such terms professionally drafted.

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