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EXECUTIVE REPORT


Battle of the forms


Adam Bernstein gives some general reminders about ensuring Terms & Conditions meet the needs of the different parties in a contract.


No matter the size of a business, its terms and conditions are its lifeblood. Of course, people rarely read what they sign and to an extent, when all are happy, contracts are an irrelevancy. However, when a deal falls apart documents are pulled out and read. For either side, ensuring terms are current and fair can make all the difference to protecting a position and an ongoing relationship.


It is important to recognise that no matter what has been agreed - ideally in writing, as it makes proving a case markedly easier - the law tends to back the party that was last in getting their terms agreed before the contract was formed. Called the ‘battle of the forms’, serving terms last is key; making a mistake here can render terms useless and non- binding as they will have been overridden. So, for example, printing terms on an invoice (and not on the documents that are signed) will not incorporate the terms into the contract as invoices are traditionally despatched after the contract has been performed.


The advance of the internet means that there is a growing practice of putting terms on a website. Generally, this will not incorporate them unless there is a clear reference to the terms and their website location when placing the order; customers must see them before the contract is accepted.


Practical tips


Ensure your terms are brought to your customer’s attention at the earliest opportunity. Consider setting them out in your brochures, catalogues or other marketing material, on your quotation forms and on your acknowledgement of order. Also print them on your invoices: this will assist an argument that they had been brought to your customer’s attention over time.


Also, train your sales team in your procedures and ensure they have at least a basic working knowledge of the rules of contract formation (offer and acceptance) and the ‘battle of the forms’. While commercial considerations are by their nature different from those for consumers, contracts should be written in plain English.


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If terms cannot be understood they are more likely to be sent to a lawyer for decoding, which may not end well. Research via the internet and reading terms you have received will give you a greater idea of what you want to talk about if you consult a lawyer, without the expense of discussing the basics with the meter running.


Building trust


Terms do more than protect a business: they help build trust. While some terms are blunt, others may well have a benefit to the other side, so explain them if necessary. For example, “we will not trade with a company that has been through a pre-pack insolvency unless certain conditions are fulfilled. This is to ensure that we minimise losses and keep costs down for all customers.” Terms should also be easy to read. Printing them in a small font with a light grey ink on a coloured background won’t make it easy for the other side to digest the contents.


The Law Society’s website can help companies find a solicitor to consult.


Keep in mind that the use of standard terms cannot be relied on in place of commercial measures such as the maintenance of good credit


procedures. Relying on terms and conditions can be likened to locking the stable door after the horse has bolted, as you will have to chase monies with a threat of legal action. It’s much better to trade only with those you can trust.


Consider how you will actively pursue breaches of a contract. Will you go to law or could alternative dispute resolution and mediation work better? It’s possible that there is a genuine fault at your end which isn’t being communicated. Talking the issue through via a neutral third party may lead to both resolution and the preservation of the commercial relationship. Lawyers might help here, and if you need to find a good solicitor, apart from seeking recommendations, you could look at the Law Society’s own website (http://solicitors.lawsociety.org.uk). Selections can be made according to practice area, location, whether you’re after a given individual or firm, and whether you want someone specialising in more than one practice area.





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