When Should Your Business Reject Changes to Your Terms and Conditions?

If your business provides products or services, you should always remember that your contracts are vital tools to protect yourself from risk. Many companies now use standard terms and conditions when dealing with customers, which can streamline processes and save time. However, your customers sometimes push back on specific terms or try to negotiate changes to your terms and conditions. While it is often good practice to be open to these discussions, it is essential to approach such requests with caution. Sometimes, you may need to take a strict approach and reject changes to your terms and conditions. This article explores the types of changes to your terms and conditions that your business might need to reject and why.

Why Should You Consider a Customer’s Changes Carefully?

Customers may request changes to your terms and conditions for various reasons. For example, they can push for more favourable conditions, reduce risks, or tailor the contract to better suit their needs. They may also want to impose stricter limits on liability to mitigate their financial exposure, such as by requesting a cap on their liability. 

While some of these requests seem reasonable initially, your business should approach them cautiously before agreeing. This careful approach will help protect your business interests and mean you do not expose yourself to unnecessary risks at a customer’s request. 

Which Changes to Your Terms Should You Be Careful About?

Customers could request changes to your terms and conditions or propose different terms or contracts. While some might seem reasonable and low-risk, you should be careful about others.

Here are some particular changes you should be wary about if a customer asks for them during contract negotiations:

Are the Customer’s Requirements Unfeasible or Impractical?

Suppose a customer asks for technically or operationally unfeasible changes to your standard terms. In that case, you may need to reject them—for example, if they demand onerous extra requirements, which will mean significant investments or system overhauls. A practical example might be if a customer requires your business to change its service offering in a way you cannot deliver. Or if they need you to invest significant additional costs in disproportionate security measures your business cannot financially commit to. 

Such changes could cause disruptions to your current business operations or huge costs, which may be a dealbreaker for you. If a customer puts forward their service agreement with contractual terms that are entirely unfit for the purpose, you may have no choice but to reject those changes because they are not workable for your project. 

Do the Changes Expose Your Business to Uncapped Liability?

Liability is a critical area in contract terms. A customer proposing to remove or significantly increase your business liability caps could expose your business to unlimited financial risk. 

Agreeing to uncapped liability could leave your business vulnerable to financial claims far exceeding your ability to compensate them, which could prejudice your financial stability. You must consider the long-term consequences of accepting such terms, which could lead to unforeseen liabilities that threaten your business. If a customer pushes for unlimited liability, consider pushing back or seeking legal advice to help achieve a middle-ground position you are comfortable with.

Do the Proposed Clauses Significantly Increase Your Risk?

You should also be cautious of clauses that disproportionately increase your risk exposure. Overly broad indemnity (or compensation) provisions could result in significant financial and legal exposure. Rejecting such high-risk provisions can help protect your business from potential financial losses, ensuring your contracts remain fair and balanced. 

So, if a customer demands a broad and uncapped indemnity obligation, you may wish to push back and negotiate the wording to protect your business from risk. 

Are the Terms Unclear or Ambiguous?

If a customer’s proposed changes introduce vague or ambiguous terms, it is wise to resist them. Contract ambiguities could, in the worst case, lead to misunderstandings and disputes, as each party may interpret the terms differently. Rejecting these changes can help you prevent future challenges and ensure that your contractual obligations are clear.

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Your terms and contracts should include clear and precise language to avoid costly disputes and ensure that both parties fully understand their rights and responsibilities. For example, unclear obligations could lead to disputes with your customers over whether or not you have met your contract targets. 

Do the Changes Breach Legal Obligations?

Rejecting the customer’s proposed changes is critical if they breach legal requirements. This could include terms that violate regulatory requirements, such as data protection laws. For instance, if you are a data processor and the customer removes the mandatory data processing terms from your contract, you could face penalties under data protection laws. 

How Can Legal Advice Help You Navigate Changes to Your Terms and Conditions?

Overall, there may be several customer changes you will need to reject or at least negotiate heavily. However, this can be difficult to judge without legal knowledge.

If your business needs support with rejecting changes to your contract terms, you can work with commercial contracts lawyers to navigate these discussions effectively. A solicitor with expertise in contract law can help you assess the potential risks and implications of proposed changes and guide you on which changes to reject. This can help you protect your business interests while maintaining positive customer relationships. 

Key Takeaways 

When your customers request changes to your terms and conditions, you should always thoroughly evaluate whether these amendments introduce impractical requirements or expose your business to excessive risks. You may wish to reject unfeasible changes, onerous liability provisions, or other terms which could lead to significant financial and legal challenges. By working with a solicitor, you will be in a better position to ensure your terms and conditions protect your business’s interests while accommodating customer needs in a commercially sensible way.

If you need assistance drafting your contracts or negotiating changes with your customers, contact LegalVision’s experienced contract lawyers as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers who can answer your questions and draft and review your documents. Call us today at 0808 196 8584 or visit our membership page.

Frequently Asked Questions

1. What should I do if a customer insists on unfair changes to my terms and conditions?

Consider seeking legal advice if a customer insists on unfair or unreasonable changes. A commercial contracts solicitor can help you negotiate more balanced terms or, if necessary, reject the changes.

2. Do I have to accept changes to my terms and conditions?

No, you cannot be forced to accept changes to your terms and conditions. Any amendments to a contract require mutual agreement. If proposed changes are unacceptable, you can reject them, but you should explain clearly to your customers.