If you are in business then you know that it takes a lot of effort to win new customers, find reliable suppliers, meet production deadlines and keep your customers happy. One of the things you do not need to waste your time on is getting into disputes with your customers about matters such as delivery arrangements, product specifications, and payment details.
Most disputes will arise because you and your customer do not agree later about what was agreed at the outset. It is astonishing how many businesses contract with their customers on the strength of conversations by telephone, or face-to-face meetings sealed with a hand shake. In a certain sense, trust is good, but mistrust is better for your business. This is where a set of written terms of business will help you, since they clearly define your responsibilities and exactly what you are going to do for the customer. They also make it clear to the customer what they must provide in exchange and when to pay your bill. The written terms will also make it clear what you are not doing, so that your customer cannot later argue that you have promised to do something else.
Your written terms can also preserve your right to recover goods from your customer in cases where you have not been paid. They can also limit your customer’s rights to allege that something has not been made properly and does not perform the task required. Unless you have written terms, you cannot prevent a customer alleging that something you have made or provided is not “fit for purpose”. Again, unless you have written terms you cannot prevent a customer alleging that you have performed your services negligently. We are not suggesting that you should treat this as a “carte blanche” to be slap dash – you know that if you do not do a job properly then you will lose customers. However, if you protect yourself contractually, you can at least prevent people bringing spurious claims against you.
If you do not have any written terms of business, or in spite of having some written terms you are having problems with customers, we recommend that you have comprehensive terms expertly prepared for you. Contact Patrick Farrington in Stafford on 01785 211411 to discuss your requirements.
Published on web site – April 2007
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.