Posted on Monday February 4, 2019
Earlier this month it was reported that a ferry company that won a key government contract had allegedly used terms and conditions which it copied from a takeaway business.
Seaborne Freight was awarded a £13.8m contract to run a ferry service in the event of a no-deal Brexit. Allegedly, the terms which the firm used told customers to check goods before “agreeing to pay for any meal”. Claims that the firm had copied the terms and conditions of an unrelated business led to widespread media attention, particularly as the terms appeared to contain language which was obviously wrong given the context of the business. It was subsequently confirmed that the terms were uploaded in error.
Using terms and conditions are important for any business. For many smaller businesses, putting in place terms and conditions is not the first priority and this issue sometimes only comes to light when something goes wrong. Without terms and conditions in place, however, a business puts itself at risk of uncertainty. In our experience, investing in a good set of business terms and conditions will avoid disputes and potentially save businesses a lot of money which they might otherwise spend on litigation. If a dispute were to arise, having clear terms in place can serve as useful evidence when enforcing a contract.
Terms and conditions will differ from business to business and industry to industry, however most business-to-business contracts will generally cover key matters such as:
- The duration of the contract
- What products and/or services the business will provide
- Payment terms and interest for late payment
- Dates for delivery
- Service standards
- What happens if a party does not comply with its obligations under the contract
- Limitation of liability
- A dispute resolution procedure
- How to end the contract
- Which laws govern the contract and in which courts legal action can take place
When transacting with consumers, additional laws and consumer rights will apply (for example a 14 day “cooling off period” when selling online, over the phone or by mail order) which would also need to be included in the terms and conditions.
The actions of Seaborne Freight highlight how important it is not to overlook terms and conditions or use terms which are not tailored specifically to your particular business requirements, particularly in light of the reputational damage which could result when customers spot this.
If you would like assistance with drafting terms and conditions for your business or a review of your existing documents please contact Sehaj Lamba.