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Terms & Conditions: Battle of the forms and contract processes

Sydney Mitchell Solicitors

A recent case has highlighted that it is of little use to have some fantastic Terms & Conditions prepared for your business, if your sales team are not trained to ensure that your contracts with your customers and suppliers, are governed by your Terms & Conditions.

If your customers and suppliers have their own Terms & Conditions, they will do their best to ensure that theirs apply to the contracts between you.

A 2015 case (Transformers and Rectifiers Ltd v Needs Ltd [2015] EWHC 269 (TCC)) showed that, if neither company has proper procedures in place, then it may be that neither company’s Terms & Conditions will apply.

If no Terms & Conditions apply to the contract for the sale of goods, the contract will be governed by the Sale of Goods Act 1979 (SGA), which imposes some implied terms on such contracts.

A supplier’s Terms & Conditions will usually seek to vary the effect of these implied terms, and limit or exclude the supplier’s liability that could arise otherwise. Standard Terms & Conditions should, of course, deal with a company’s liabilities, as well as setting out the terms that would apply to ordering, delivery, payment etc.

However, the company’s internal processes should also make sure that the Terms & Conditions are incorporated into its contracts.

This is a matter that will depend exclusively on how the company’s office employees work. Where do the Terms & Conditions appear? Do customers and suppliers actually see a copy of the Terms & Conditions? How do employees reply to orders placed?

How do they respond to queries from customers and suppliers?

The answer to the problem of incorporation of your Terms & Conditions into your contracts could even be as simple as amending everyone’s signature block, so that all emails sent out refer to the company’s Terms & Conditions.

For a review of your current Terms & Conditions and order processes, or for further information, please contact Suzanna Patalong at Sydney Mitchell on 0121 698 2200 or s.patalong@sydneymitchell.co.uk or complete our online enquiry form.