I regularly get clients asking me to review their terms of business and when responding I always check whether they are actually including the terms into the contracts they are making, this is called incorporating terms. For example, if a business only includes their terms and conditions on an invoice after the contract has been made they won’t usually be incorporated into the contract as the terms must be included in the contract at the time of formation (usually when the order or purchase is confirmed).
By failing to have a procedure in place to incorporate your terms of business you risk not being able to rely on them and the various provisions protecting you, or having to ask the court to imply your terms into the contract based on your course of dealing with the customer. Therefore, it’s safer and cheaper to incorporate at the time the contract is made and I’ve listed the easiest ways to do this below.
- Putting your terms of business on the reverse of order forms stating on the forms that all orders are subject to the terms overleaf and then requesting customers to sign the form.
- Placing your terms on your website and using a “tick box” function requesting that all customers have read and agreed to your terms of business when making the order.
- Including your terms in any written correspondence with your customers stating that all correspondence is subject to your terms of business and / or subject to contract (i.e. not binding until a written contract has been entered into).
Regardless of how you make contracts it’s good practice to take all reasonable steps to bring your terms to the customer’s attention as early as possible in the negotiation phase as it reduces the risk of the customer arguing they were not aware of your terms.
I have also listed some useful provisions below to include in your terms of business regarding incorporation.
- Your terms and conditions prevail over any terms of business your customer has or has sought to introduce into the contract.
- Your terms of business don’t have to be signed in order to bind the customer.
- The customer’s order form constitutes an offer and a contract is only formed when you issue order confirmation.
If you have any queries regarding your terms of business: including incorporation, reviewing or preparing a new set please contact Gavin Hesketh on 0114 224 2097 or at [email protected]
