The Importance of Terms and Conditions

When you buy goods or services you’re often prompted to agree to terms and conditions. It’s common for people to quickly tick off the box that confirms you have read and agreed with them without batting an eye. Most people don’t think too much about terms and conditions, but did you know that as a business owner adequate and tailored terms and conditions can protect your business and even save you money in the long run?

Business terms and conditions are the part of an agreement that sets out the rights and responsibilities of each party to a transaction. The use of standard terms and conditions will often be inadequate and potentially expose your business to risk. Terms and conditions should be customised to suit the type of business you operate. It’s essential to obtain legal advice and have appropriate terms and conditions prepared to ensure that your business is well protected when a problem arises but will also minimise the chance of a problem occurring in the first place. The initial investment of having appropriate and well drafted terms and conditions certainly outweighs the possibility of future headaches.

Here are a couple of examples where tailored terms and conditions proved beneficial:

The one about fruit

The company operated a freight business transporting fruit in a refrigerated carrier. The company was certified to certain industry standards. These standards stipulated that the company transported fruit between set temperatures and the company operated its business on this basis. 

The company transported fruit to its customer in accordance with its certification. Upon delivery, the fruit was overripe.  The customer claimed the company had failed to transport the fruit in accordance with its “industry” standards, which it claimed was a temperature range below the company’s certification and refused to pay monies owing to the company. The parties fell into dispute.

Unfortunately, the company’s terms and conditions did not specify that the customer only warranted to freight goods in accordance with its own certification. Tailored terms and conditions in this instance would have assisted the company in resolving the dispute if not avoiding it altogether. 

The one about wholesale

A small boutique business sold printed merchandise online. The business owner designs the merchandise but has them printed by a third-party printing company. The business was thriving so well it began receiving requests to sell its merchandise in bulk. 

Before expanding the business to wholesale, the business owner sought legal advice to ensure that the business was protected. The business already had simple terms and conditions for the online shop but did not protect the business for wholesale or consider the third-party printing company’s own terms and conditions regarding defective printing. 

Tailored terms and conditions provide for the boutique to limit its liability and available customer remedies to match that of its supplier and thereby reduce its risk to what it can recover.

Cohen Legal can tailor your terms and conditions to the specific needs of your business. We can also review your terms and conditions to ensure you are protected and comply with any obligations under Australian Consumer Law. If you run an online business, we can also assist with drafting your website terms of use and privacy policy.