OK, so you want some terms and conditions for your business. What are your options? There are just 5 to choose from:
1. Write your own. 2. Download a template from the web. 3. Let your solicitor or lawyer have a go. 4. Copy some terms from a competitor. 5. Let a credit management specialist write your terms.
Whichever option you choose should depend upon why you need business terms and conditions. Do you want some professional-looking text simply to look, well, professional? If so, then all you need to do is choose Option 2 i.e. download a cheap generic set of terms from the web.
If, however, your business will be offering goods or services on credit then you need a set of business terms suited for this purpose. This is because a great set has the ability to:
i) help prevent late payment by your customers or debtors. ii) give you real options in case of late payment or non-payment by your customers.
1. Write your own. If you have some legal training or higher education in commercial and contract law, then you could draft your own terms. But how long would it take you? And how can you be sure that you include everything important, especially from a credit management perspective?
2. Download a template from the web. If you are on a tight budget then this might be an option. But do you know who wrote the original terms and conditions template? Do they work in practice? How will they stand up in court if you need to enforce your rights? Who will create the additional clauses you’ll need for your particular business and industry? How much customisation is possible? And, again, how can you be sure that they include everything important, especially from a credit management perspective.
3. Let your local solicitor or lawyer have a go. Yes, they have the training. But in practice, how many sets of terms do they create for local businesses on a regular basis? One or two a month is usual because many solicitors are also busy focusing upon divorce, conveyancing, probate and litigation work. And the biggest question here is how much will a solicitor charge you for a fully bespoke set of terms and conditions?
In one shocking example, we saw a UK client with a little over half a page of clauses in his terms after having been charged over £3000 (US$4800) by his solicitor. Although your terms need not be lengthy to be effective, you do not need to be charged excessive amounts. In another example, the terms available online from a major UK professional body with a royal charter are over nine pages long and yet still have 5 key credit management areas completely absent with a further 7 areas requiring improvement.
4. Copy from a competitor. Whatever you do, don’t be tempted to copy a competitor’s terms and conditions. If you are caught, then there could be financial penalties and even worse, the negative publicity to suffer as a consequence. Recent European legal cases can be quoted that illustrate the perils of this route.
In any case, the copied terms are rarely sufficient to protect the business fully. This deficiency is usually due to either lack of relevant credit management terms or the absence of clauses which address key legislation such as the Data Protection Act, Sale of Goods Act etc.
5. Ask credit management specialists to create your business terms and conditions. If chosen carefully, they’ll draft a fully-customised set of terms and conditions that will be right for your business from the get-go. Make sure they are aware of the various permutations necessary for each industry sector. It is possible to word your terms so that your business can benefit financially from a free debt collection service and from massive improvements in your cash-flow. So look for a credit management professional that can not only write your business terms and client documentation but also show you how to leverage them to best effect to gradually educate your clients to pay you on time. And if you succeed here, then that will have a very positive impact on your business cashflow.