Your terms and conditions are the backbone of your business, irrespective of the business model (e.g. sole trader, limited company, partnership) that you've chosen.
Terms and conditions set the rules for how you trade, what you’ll tolerate, what you’ll give and how you’ll behave, including in the event that something goes wrong.
When it comes to selling to consumers, you should have terms and conditions in place and the law is a lot more prescriptive about what you can or cannot include in them.
In fact, there are certain things you can’t avoid including.
It helps to know what these are and what their impact is on your business (and its risk profile especially).
The good news is that within the boundaries of the legal rules, you’ll typically get to impose the terms that you’ve chosen, because consumers will generally accept them, or they'll have limited ability to negotiate them... although behaving inconsiderately is rarely a good sales strategy.
What's in this guide?
In this guide, we’ll be focusing on what you’d expect to find in most consumer-facing terms and conditions documents and crucially, what these terms mean.
Of course, most terms should be tailored to suit the particular business to which they belong, but our guide will give you a good idea of what the main essential clauses are, and what they mean.
If you're ready to create your terms and conditions right now, you can rely on Farillio to do the hard work for you and speedily select what you need.
All you need to do is use our handy template selector and in 4 simple steps - or fewer, Farillio will identify the right terms and conditions template to get you started.
You may end up with more than 1 set
You may need different terms and conditions for different sales activities that you carry out.
For example, if you sell both from your website and from your shop, you'll need different terms and conditions to cover those separate activities, because different rules may apply.
If you're selling on someone else's platform, you'll likely be subject to their terms and conditions, or you might have a separate distribution contract with them.
What terms and conditions usually include?
What you need to cover will depend on the answers to a few questions that shouldn't be hard for you to answer.
3 critical questions upfront:
There are 3 critical factors to consider upfront - and these will help you identify what sort of terms you need, and what they need to cover:
To whom you’re selling (i.e. are you selling to consumers or other businesses? – because quite different rules apply to each)
What you’re selling (goods, services, digital content, or a combination?)
How or where, you’re selling (online, from a physical location, by catalogue/telesales?)
Our templates will do all the hard work for you. Just use Farillio's handy template selector and after a few simple questions you'll have the terms and conditions you need!
What's covered after that?
Most terms and conditions will cover the following factors, tailored to suit your particular business activities:
- a clear description of the goods or services that you're selling
- how to buy those goods from you
- your invoicing and payment arrangements
- how cancellations and refunds work
- any relevant timelines for delivery of the goods or performance of the services
- how delivery or performance of the goods or services will take place
- when responsibility and ownership of any goods passes from you to the consumer
- when the sale's completed.
Terms and conditions vs contracts for sale
Terms and conditions are not the same as contracts for sale.
While both documents are contracts, they tend to be used in quite different contexts:
Terms and conditions
These are typically used for repeat custom arrangements, and those that are relatively swift and low value.
Where you're setting out your trading terms using terms and conditions, you''ll usually either be:
the party with the largest negotiating power over trading terms
in a position where you don't really need to negotiate terms at all
That might be the case, for example, where you're dealing with consumers in a store or business users for an equipment hire service.
Terms and conditions work really well when you don't want to change your sales position from one sale to the next. So they work especially well for businesses selling to consumers.
Contracts for sale
Contracts for sale are more common where sales take place between businesses.
Even here, terms and conditions will often suffice, except where your trading relationship is likely to involve:
- higher value goods or services, and/or
- involve higher risk in delivery or performance, and/or
- more negotiated/bespoke terms.
Contracts for sale work well in the above scenarios, so that you can avoid giving every business customer those same terms.
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