As a smaller Jersey business, is it important to have terms and conditions of business?
Terms of business are the standard terms on which a business trades with its customers and suppliers. They are a fundamental tool within a business but probably one of the most neglected areas of a business.
If you don’t specify terms and conditions you put your business at risk – it’s vital to establish the actual arrangement between the parties involved.
One of the main issues terms and conditions will deal with is payment. It will set out when a customer is expected to pay, how much, any late payment penalties, and collection costs if the matter escalates. Without such issues being addressed the business may find it difficult to enforce payment and could possibly end up not recovering the fees or costs for the product or service.
Likewise with service or product quality, deadlines for completion or delivery, and returns and refunds. If a client can review these terms before purchasing the product or service, everyone enters the transaction informed. This prevents the misunderstandings that can lead to dispute resolution procedures later.
If you don’t use terms and conditions the business may find either it doesn’t get paid or has to spend time and money taking the customer to court to recover hard-earned fees.
What should business terms and conditions state?
Among other things your terms and conditions should list:
- What work will you do for the client.
- Payment obligations.
- Your business procedures.
- Termination of contract provisions.
- Limits as to your liability.
- Data protection.
- Dispute resolution provisions.
Where should I obtain terms and conditions from?
It is always advisable to instruct a Jersey lawyer to assist you in drawing up terms and conditions suitable for a Jersey business. Some businesses aim to save costs and will download terms and condition templates from the internet. The internet offers many different templates which may or may not be suitable for your business. The problem is that you will only find out if the downloaded template is suitable for Jersey if and when you get into a dispute with a client.
Do I need my customers to sign the terms and conditions?
It is important to ensure that you have adequate evidence that your client has acknowledged they are bound by your terms and conditions. The safest way to do this is to get them to sign the terms and conditions. This removes ambiguity.
What are the implications of not having effective terms and conditions?
In a nutshell not having appropriate terms and conditions can impact your cash-flow through delayed payments and having to pay for materials before taking payments. Late payment is a fact of life for small businesses, as clients often give lower priority to bills from small firms. With the right terms in place, however, you can ensure that you get paid first.