Business terms and conditions govern the contractual relationship between the business and its customers. A properly drafted Business Terms and Conditions document explicitly specify the rights and obligations of both parties- you and your customers. Your business may provide services to the customer or sell goods to the customer, your business may links customer and supplier at an online platform, no matter what type of business you are running, you can benefit from properly drafted business terms and conditions by an experienced commercial lawyer as it would limit your liability in an unfortunate situation and provides you the much needed protection.
Key Components of Business Terms and Conditions:
Because every business is different, Business Terms and Conditions should be tailored to the specific types and needs of an individual business. Generally some of the more common clauses in Business Terms and Conditions are as follows:
Scope of the Services Clause:
Scope of the service section needs to clearly enunciate what Products or services will be delivered? How and when it will be delivered? And most importantly whether there is any limitation with services being offered to your customers. A professionally drafted scope of the services clause manages customers’ expectations as you would clearly define the scope of your duties and the precise manner in which these tasks will be delivered to your client.
The payment clause should specify the payment and state when and how you want your customer to make payment for your services. If you require upfront payment for your service, the payment clause needs to highlight this issue. If you are not paid on time, the clause needs to specify the interest for late payment and what other actions you may take to recover payment.
Limitation of Liability Clause
One of the most important factors in drafting limitation of liability clause involves scrutinizing the nature and type of the business and asking what kind of transactions the business will be involved in? And what could go wrong with the potential transactions? A careful examination of these issues then dictates to what extent your business could be liable in the event of damage, loss or injury and what could be done realistically to minimise liability. It is important to understand the implications of Sale of Goods Act 1923 and Australian Consumer Law may have on the limitations of liability clause.
Intellectual Property Clause
If an intellectual property is generated in course of providing service to the customer, then the Business Terms and Conditions need to stipulate who owns that property and at what point ownership passes to the customer.
Privacy clause sets out how your company will keep client’s information, uses it, discloses it and maintains it.
The Termination clause effectively sets out how and in what circumstances a party to the agreement could walk away from the contract. And should such circumstances occur, what consequences would flow from it?
Dispute Resolution Clause
A Dispute Resolution Clausedeals with the procedure in settling dispute between the parties. The emphasis of this will be on the parties to negotiate the disputed matter in good faith. The clause should also highlight that if negotiations failed to reach a satisfactory outcome, then the prospect of Alternative Dispute Resolution such as Conciliation, Mediation or Arbitration can be explored before commencing legal action.
The above discussions are by no means an exhaustive list of the essential components of Business Terms and Conditions. Issues like variations and modifications of the agreement, restraint of trade, insurance, subcontracting may arise from time to time as your business experiences steady growth with the passing of time. Since business transactions are complex, a good contract lawyer is always helpful to ensure the legal documents of your business are appropriately worded reflecting your best interest. K Group Legal offers professional support to small Businesses in Australia in drafting Business Terms and Conditions reflecting the genuine needs of the business. If you need professional assistance with drafting your Business Terms and Conditions, or want someone to review your existing legal agreements, you could contact us on (02) 8379 1811 or firstname.lastname@example.org.