In times of uncertainty we are much more likely to focus on the terms and conditions of our business agreements than when we are in the rush of excitement about our ideas. I wonder how many of us are guilty of signing the dotted line of an agreement having not read the terms and conditions?
The current Coronavirus pandemic has hit the events industry hard and everyday I am reading social media posts from worried suppliers not knowing what their terms and conditions mean in the wake of cancelled events. We’ve learnt lots of lessons from organising events and working with other organisers from complying with GDPR to deciding on your cancellation policy and our advice when it comes to terms and conditions is to sort them early to save yourself grief in the long run. Ignoring terms and conditions could affect your cash flow, the viability of your project and even your credibility.
These are our tips for getting your terms and conditions right and ready should anything go wrong.
Clarity and protection
Your terms and conditions will help to avoid misunderstandings, so it’s vital that the arrangement between the two parties involved in any deal is clear. You need to cover yourself, so your clients have no opportunity to go back on their word. Published terms protect you if things go wrong. Be clear and transparent in simple and understandable language.
What to include
Include a clear definition of what products or services will be provided setting out the payment terms (such as when it is due) and any guarantees or warranties offered. Ensure you have clear timelines for delivery and any queries and specify what happens if either party doesn’t deliver, pay or wants to end the relationship or return the products. And don’t forget to include which law will govern the contract.
The law
Some things must be included on invoices by law like your business name and address and if you are a limited company you must set out the company name, the company number, where it is registered, the registered office address (which may be different to your actual trading or correspondence address) and if you wish, all the names of the directors, not just some of them. If the business is registered for VAT, it must state the VAT number. There is no legal requirement to include terms and conditions on invoices though many people put their terms on the back of them.
Fit for purpose
Be clear when the customer will pay, the right to cancel and your returns policy and be sure your terms fit your business, you can’t assume another business will have the same needs as yours. If in any doubt consult a lawyer. You should display terms and conditions on your website.
Plan of action
Start with a list of the key terms that you are offering your customers and talk through what could go wrong and your solution for each. Stop and think about it from your customers’ point of view, is the language clear and user friendly. Hiding terms in small unreadable fonts does not demonstrate that you are transparent or fair. Review and update, from time to time and if in doubt ask for advice from a professional or a fellow business owner.