We have recently seen an increase in the number of clients who are looking to update their standard terms and conditions of business to improve their chances of recovering unpaid invoices.

Businesses generally pay little attention to their terms and conditions (T&C’s), especially in the midst of an exciting start up or worldwide pandemic and the ensuing economic consequences.  Your business’s T&C’s are crucial in offering protection should a dispute with a customer arise.

Well written T&C’s greatly improve the chances of being able to recover unpaid invoices and/or goods.

In a dispute the first thing the Court will look at is what did the parties think the terms of their contract/agreement were. If your terms are clear, are incorporated before or at the time of acceptance and were agreed in writing, you are more likely to be successful in recovering payment. Well drafted terms, correctly incorporated into your contracts with your customers, can make pursuing invoices and resolving dis­putes less problematic and more importantly, can save you the cost of time-consuming litigation.

Examples of what your T&C’s could cover:

• Sales goods remain owned by you until paid for in full, giving you protection to take the goods back if they have been delivered but not yet paid for.
• Outline payment terms and the consequences of late payment or failure to pay.
• Specify goods or services to be provided.
• Specify performance and delivery conditions.
• Detail guarantees/warranties.
• Explain how to terminate the contract if either side is in breach.

Similarly, we would advise that protections in the form of limitations and exclusions on your liability under a contract (to the extent permitted in law) are carefully employed. Some liabilities cannot be excluded in law and widely drafted exclusions are often found to be unenforceable in practice. KBL has a wealth of expertise in drafting enforceable limitations and exclusions of liability, we can provide helpful advice on the enforceability of your current exclusion clauses and suggest ways of increasing your protection.

At KBL, we don’t just draft a set of terms for you to go away and disseminate to your customers. We are keen to ensure you understand how to correctly use your terms. T&C’s are useless if they have not been properly accepted by your clients at the time the contract is made. For example, are your current terms printed on the back of your invoice? An invoice is traditionally dispatched after the contract has been formed so unless you can establish the terms were known by the client when they entered into the contract with you, they are likely to be unenforceable. We also give specific advice in relation to contracts with specific clients. Have you considered who should be signing your T&C’s on behalf of the customer? Which Company in the group is the relevant one? Do they have authority to enter into the contract with you?

In practice, obliging customers to return a signed copy of your T&C’s before starting work on a particular contract, will give you the best chance of proving that they have been agreed/incorporated into the contract. If not, and you want them to apply, the burden is on you to show that you’ve brought them to the customer’s attention at the time the contract was made.

The COVID-19 pandemic has challenged the day-to-day running of businesses requiring a review of their T&C’s. Certain provisions may need amending to incorporate the impacts of the pandemic. We will ensure your T&C’s accurately reflect how the business intends to operate during the uncertainty of the COVID-19 pandemic.

T&C’s should be tailored to your business and there are many other suitable clauses that we might advise should be incorporated, such as confidentiality provisions, restrictions on poaching, limitations on entitlement to cancel or suspend payments or services etc.

If you have your own T&C’s, we can review them with a view to checking its enforceability and suggesting ways to limit your exposure to claims/liabilities further.

It is important that you review your T&C’s periodically to ensure that they consistently meet the needs of your business.

For more information please contact:

Greg Gardner-Boyes      ggardner-boyes@kbl.co.uk       01254 268790

Anneka Traynor              atraynor@kbl.co.uk                   01204 527777