In our last blog, we explained why every business should have clear Terms and Conditions (T&Cs). But what exactly needs to be included to make your T&Cs legally robust and commercially effective? Here, we break down the key clauses every business should consider and why they matter.
Payment Terms: Protecting Your Cashflow
Clear payment terms are essential for protecting your cashflow and avoiding disputes, so it’s important to set these out clearly in your T&Cs.
Set out specific payment deadlines (e.g., 14 or 30 days from invoice) so clients know exactly when payment is due.
Include late payment charges or interest to encourage timely settlement and protect cashflow.
Without clear terms, you risk overdue invoices and difficulties recovering money, which can seriously affect business operations.
Delivery and Risk: Clarifying Responsibility
For businesses supplying goods, delivery and risk clauses help avoid disagreements about who is responsible for delays or damage in transit.
Key areas to cover include:
Define precisely when delivery occurs, whether that’s when goods leave your premises, arrive with the buyer, or are accepted at the delivery location.
Clarify when risk transfers to the buyer, especially in cases of damage during transport.
Set out what happens if delivery is delayed or refused, including any rights the buyer has and your process for handling such issues.
Service providers should also define what counts as “completion”, using acceptance tests or sign-off processes to avoid disputes.
Warranties and Remedies: Setting Clear Expectations
A well-drafted warranty clause sets clear expectations about the quality and performance of your products or services and clarifies what happens if something goes wrong.
Your T&Cs should include:
A clear warranty period (e.g., 12 months from delivery).
Exclusions such as misuse, normal wear and tear, or unauthorised modifications.
The remedies you will offer, repair, replacement, or refund, so expectations are transparent.
Limiting Liability: Protecting Your Business
A limitation of liability clause caps the financial exposure your business faces if something goes wrong and is one of the most important clauses in any T&Cs.
Under UK law, certain liabilities cannot be limited (e.g., death or personal injury caused by negligence, fraud, or selling goods you have no right to sell). This makes it even more important to limit what you can legally limit.
A well-balanced clause can:
Set a reasonable financial cap, commonly the total contract value.
Exclude consequential or indirect losses such as loss of profit or goodwill.
Clarify responsibilities so both parties fully understand their position.
If you do not include a limitation of liability clause, you may be exposed to unlimited liability, posing a serious risk to your business.
T&Cs That Work for Your Business
Your T&Cs are fundamental to how your business operates. They are not simply a formality, they protect both you and your clients and should reflect the reality of how your business works, rather than relying on a generic template.
If you’re unsure whether your current T&Cs are robust, compliant, or fit for purpose, we can help review or update them
Email: [email protected]
Call: 0333 888 1360
