Hands up if you read all the small print on the back of an order form?
Who scrolls through and actually reads the terms and conditions on a website before clicking to accept?
I’m not seeing many hands!
OK, I admit it. When I’m in a hurry (which is most of the time) I don’t read them either.
So, this begs the question, if nobody reads the terms and conditions why use them?
Well, just because you haven’t read them, it doesn’t mean they don’t apply. Once accepted, the terms and conditions form a legally binding contract whether you’ve read them or not.
Let’s look at this from the business’s perspective.
When you’re offering to provide a service (or a client asks for your help), it’s not always clear to your client exactly what you’re going to do for them. Let’s take marketing as an example (because I represent many digital agencies so I see first hand the problems they encounter with their clients).
Say a client wants you to manage their social media marketing for them. They want you to do everything from creating and posting new content to responding to questions and comments from followers. They also want you to run their advertising campaigns for them because they’ve heard that Facebook advertising is the thing to be involved with right now. However, they don’t really understand what’s involved. All they know is that they want to pay as little as possible for a maximum return on investment.
Does this sound familiar?
There’s no legal reason at all why you need a written contract to provide this service. A verbal agreement would be equally binding on the client provided you fully explained to them the terms of your agreement.
You would need to explain to your client what is involved in providing your service, how much you are going to charge, when you are going to start, how long it will take, what results you’re anticipating (if any), whether the results are a target or are guaranteed, what happens if the guaranteed result is not met, and many other small details.
This is because for a contract to be legally binding, one party must make an offer that the other accepts and then there must be an exchange of value, normally money (referred to as “consideration” in legal terms). However, there must be sufficient certainty in the offer for the other party to be able to accept it.
“We will look after your social media marketing for £X per month” is so vague that it has almost no certainty and so wouldn’t be legally binding.
So, are you confident you would be able to cover everything you need to, with every client, every time?
Would you be confident in delegating this responsibility to a member of staff?
This is why you need written terms and conditions of business. They ensure you cover all the essential points for you to have a legally binding contract with every client.
No only this, they save you time and they allow you to confidently authorise your staff to enter into contracts on your behalf.
And this is before there’s any dispute.
If you didn’t have a written contract and your client was slow in paying, or if they disputed your services in any way, your client could deny agreeing to your terms of business or even deny having any contract with you at all.
They could say “I never agreed to that” and you would have to provide evidence that they did because in any dispute, it’s your case to prove, not your client’s case to disprove.
Having a written contract eliminates this problem.
I said earlier in this post that there was no legal reason why you had to have a written contract with your client. Well, there is one reason why a contract with your client has to be in writing. If your client wants to own all of the intellectual property you produce (as most clients do), the contract must be in writing. This is because the law says you can only transfer ownership of intellectual property rights by way of a written contract signed by the transferor (in this case the agency).
Even if you agreed verbally with your client that they would own everything you produced for them, this wouldn’t be valid. (If this has happened in the past, please give me a call and I’ll help you sort the problem out.)
If you sell products and services online, having standard terms and conditions of business becomes essential as they serve a dual purpose.
First, as you won’t have any direct contact with your clients you won’t be able to have a verbal contract with them. Therefore, you will need written terms and conditions of business for them to click and accept.
Second, if you are selling online there are far more laws and regulations for you to comply with. Having properly drafted terms and conditions can help you comply with these.
I explain more about trading online in this blog post:
Related content: Blog – Legal issues to consider when starting an online business
So, whilst your terms and conditions might not be given much thought or consideration by your client, they are hugely important for your business.
Investing in properly drafted terms and conditions of business will save you time when entering into new contracts with clients, they will help you comply with the law and they will save you money when it comes to avoiding costly disputes.
If you have any questions about the importance of having standard terms and conditions of business, or if you would like me to prepare them for you, please feel free to call me and I will be happy to talk on a no obligation basis.