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At times, you are likely to feel that running your business involves nothing more than juggling endless paperwork. Nearly all commercial companies need contracts and agreements to manage legal risk and client expectations, and one of those is a sales terms and conditions document. This article will explain the purpose of a sales terms and conditions document to help your business ensure it has sufficient legal protection against future consumer disputes.
How Will Sales Terms and Conditions Benefit My Business?
The document aims to inform your customers of their rights, responsibilities and risks upon purchasing goods or services from your company. A well-drafted terms and conditions document (otherwise known as sales terms or a purchase agreement) can ensure your clients enter into a purchase on your terms. This document helps set out obligations and rights between you and your customers in the event of any future legal action.
What Does My Company Need to Include Within Its Sales Terms and Conditions Document?
This will depend on the nature of your business, so let us consider a quick example.
Let us say that your business sells artwork to consumers via your website. In this case, your sales terms and conditions should provide detail about:
- the artwork itself;
- how and when they pay your company for the artwork and the right to any future refund;
- their right to cancel and when that right is lost;
- delivery charges, potential delivery times and the boundaries of where you are willing to deliver items to (you may note that many businesses limit themselves to ‘mainland UK’);
- information concerning guarantees as to item quality and, where the artwork is not sufficient, any rights as to return or exchange;
- the rights of the parties to terminate the sale;
- who owns the intellectual property in the artwork;
- the ability of the parties to seek damages or compensation from each other due to contract breach;
- clauses limiting liability and excluding some types of losses; and
- confirmation of the law that applies to the contract, most likely the law of England and Wales.
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Which Clauses Are Particularly Important?
Most customers are likely to consider and value wording relating to order cancellation, returns, and refunds or exchanges. This is the same whether dealing with global websites or small businesses.
In terms of cancellation, it is wise for your business to clearly state that all orders are subject to availability and your company’s approach to delayed delivery. Upon facing a delay in delivery (let us say because of running out of stock), your business can either offer an automatic refund through the cancellation of the order or, instead, offer the customer a similar product.
Alternatively, your business could offer the equivalent of store credit towards an alternative item or simply refund the original amount as a sign of goodwill.
How Important Is a Sales Terms and Conditions Document?
The document can help demonstrate that your consumer was fully aware of their rights and obligations before finalising the sale. Informing customers of the terms within pre-existing terms and conditions can help quash potential disputes and help your business defend any future claims.
The existence of a well-drafted terms and conditions document can be a helpful tool in preventing claims.
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Do Courts Enforce Sales Terms and Conditions?
Terms and conditions are a type of legal contract. They will generally be enforceable in court in the event of a dispute as long as the terms and conditions are:
- reasonable;
- clear;
- precise; and
- agreed to by the customer.
You must ensure that the terms of the contract are fair and reasonable. There are laws in England and Wales dealing with unfair contract terms. These terms are generally unenforceable, which means it is important to ensure your terms and conditions are compliant with the law.
Key Takeaways
To summarise, sales terms and conditions documents aim to provide consumers with information about their legal rights whilst purchasing goods or services from your company.
The document essentially acts as a summary of the legal rights and obligations between your business and customers. It is worth considering the professional drafting of the document for your business and website, if applicable, because of the need to tailor the document to meet your company’s needs. If you need help with a Sales Terms and Conditions document, our experienced commercial contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 258 4780 or visit our membership page.
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