Business Owners: What’s in the Terms and Conditions You Give to Your Customers?

Laybourn-Nick-OPTBy Nick Laybourn

Special to Business in Savannah

As a business owner you closely review the terms your vendors give you, but have you recently reviewed the terms and conditions you give your customers? Many businesses use a boilerplate form or have language that is outdated or not customized to the business needs. There are many issues making demands on your time, but your company’s terms and conditions are not something you can afford to neglect. Fortunately, this issue is simple — and highly beneficial — to remedy.

Terms and conditions are contractually binding statements of the provisions, duties, and responsibilities that exist between your company and your customer. They are typically found on the back or lower portion of an invoice or quote. These statements are essential to, among other things, protecting your business interests and ensuring customer payments are promptly received. Well-written terms and conditions can also serve as a money-saving instrument should litigation arise out of the goods or services you provide to your customer.

Too often a company’s terms and conditions are outdated creations cobbled together from outside sources. In this case the text may not protect your company’s best interests, and certainly isn’t serving as the powerful tool it should be. If a dispute arises and you’ve failed to put adequate terms in place, it can create great difficulty for those working to represent your best interests.

Updating your terms and conditions with a legal professional provides the opportunity to strengthen and clarify a wide range of important topics:

Defining services and terms. A definition of products and the services provided as well as a clear delineation of payment terms are the best defense against possible misinterpretations.

Limiting damages. A simple liability clause can clearly outline what your company is and is not responsible for in the event of a failure to meet contract terms.

Limiting warranties. If your company offers any warranties or guarantees, it’s essential to clarify those terms for all parties and ensure they are in line with your other company materials.

Providing indemnity. An indemnity clause in your terms and conditions can protect against any potential costs for legal claims down the line.

Determining litigation location. If a disagreement over your company’s services results in litigation, the terms and conditions are your opportunity to specify where the case will be litigated (for instance, this may not necessarily be in Savannah if your company has interests elsewhere).

Enforcing arbitration. This prevents disputes from being litigated in court. Instead, you can stipulate that disputes that may arise be resolved by a qualified arbitrator.

Beyond covering each of these vital areas, it’s important to make sure your company’s terms and conditions are compatible with all of your other business agreements. If there are conflicts or ambiguities in your documentation, they may create problems should you be involved in a dispute with a customer.

With terms and conditions that are clear, current, and tailored to your situation, your business can be protected both in everyday dealings and in future disputes. Once you check this off your list, you can get back to doing what you do best — running your business.