Getting Started out on Commercial Contracts
A legally binding contract will exist between two people or firms exactly where a single agrees to complete or sell a thing in exchange for some thing else (typically income). With extremely handful of exceptions, it doesn’t need to be in writing but the purpose why they must place in writing is that otherwise it may be 1 person’s word against one more either as to whether or not the contract exists or as to its exact terms. Even if it really is in writing, the which means ought to be clear and not capable of misinterpretation – consequently, you’ll need to create confident it really is as easy and “to-the-point” as you possibly can.
Naturally, you’re in impact getting into into contracts all of the time (e.g. acquiring a newspaper, going into a car park, buying a drink) and you cannot place almost everything in writing. You may as a result must exercising some degree of discretion as to when to put something in writing – if in doubt, ask your solicitor. Some contracts have to be in writing (e.g. for interests in land or for finance) – soon electronic contracts will be adequate for these purposes.
You could possibly want general “terms & conditions” depending on your business needs and you ought to discuss no matter whether or not you do in fact need them with your solicitor. If you already have standard terms & conditions, you’ll need to create confident that:
they are not just copied from someone else – the terms may be inappropriate if they were copied from someone operating slightly differently from you and they may possibly be out of date and/or defective (plus it really is a technical breach of copyright too).
they are drawn to the other person’s/company’s attention before the contract is entered into as otherwise they will not usually be binding on them.
A good practice is to get a copy of your contract letter or standard terms & conditions signed by them – do not rely on the terms being printed on the back of invoices. Try and avoid conflict among your terms and those of your supplier or customer by agreeing whose terms are to apply. Also ensure that agreed terms between your and a supplier are not at odds with your own terms with your customers (e.g. so that your supplier will not accept faulty goods after one particular week from delivery whereas yours specify two weeks).
Some common clauses include:
Price, date payment is due and method of payment
Delivery details and non-liability of seller for delay beyond its control
Seller retaining ownership till goods are paid for but requiring buyer to carry risk for them and to insure them
Limitation on seller’s liability
Some important points relating to terms & conditions
no matter what a contract says, certain rights are implied by law or by statute (always seek proper legal advice on such matters) e.g. the goods must be “fit for the purpose” for which they are sold and be of “suitable quality”. Goods ought to match samples (unless “tolerances” are specified) or descriptions in promotional literature, so it truly is important samples are truly representative and brochure claims are realistic. If the goods are not suitable for the intended use but the buyer insists on acquiring them despite that, confirm your warning in writing immediately. The same broadly applies to on-line selling.
if you deal with private consumers as your customers or clients (including as a landlord) any standard terms (whether in a letter or in a printed contract) are subject to the European Directive on Unfair Contract Terms and as such they must be “fair”, otherwise they will probably be of no legal effect whatsoever. Bear in mind that with consumer sales in the EU, no matter what your terms say, local consumer laws will override any contrary terms in your contracts. See our report on the new jurisdiction rules for electronic consumer contracts.
if you print terms on the back of something, ensure that on the front you refer to their presence on the back (e.g. “See over for our standard terms of trading”).
trading on the Internet brings special considerations – terms want to be sufficiently prominent and well-placed to become effective. Effectiveness will depend upon individual circumstances – in some cases it will be necessary to make the terms appear in a “pop-up” window then force customers to scroll down before having to expressly click an acceptance button.
if you sell goods or services on the Internet or by telephone or mail order, the Consumer Protection (Distance Selling) Regulations 2000 will apply. See our lay overview of the Regulations or our detailed technical briefing.
from January 16th the EU Ecommerce Directive is supposed to become effective and contracts and web sites should be constructed with this in mind as its requirements are strict: see our write-up on the Directive
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