When supplying services, having robust and well-drafted Terms & Conditions (T&Cs) can protect your business from unnecessary risk and costly disputes. Here are six key points every supplier should consider:
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Clear Scope of Success
If your services vary from client to client, ensure the scope is clearly defined for each contract. A vague or incomplete scope can lead to disputes, unexpected costs, and dissatisfied customers who feel they didn't receive what they expected. -
Customer Responsibilities
Identify any actions or inputs you need from your customers to deliver your services efficiently. This might include attending meetings, providing timely feedback, supplying key information, or obtaining necessary licences or approvals. Clearly setting out these dependencies helps avoid delays and misunderstandings. -
Intellectual Property Protection
Clearly define who owns any intellectual property (IP) created as part of your services. If you are providing bespoke solutions, ensure your T&Cs specify whether the customer has a licence to use your IP or whether ownership transfers to them. Protecting your IP can help prevent unauthorised use and safeguard your business's valuable assets. -
Limits of Liability
A missing or poorly drafted liability cap can put your entire business at risk. Ensure your T&Cs include a clear financial liability cap that aligns with the level of risk you're prepared to accept. Be cautious with caps linked to overall customer spend, as they can quickly escalate with repeat business. -
Termination Rights
Check whether you have a right to terminate for convenience (i.e. without cause). If this is missing or unclear, you may be locked into an undesirable contract. Consider how termination affects customer payment obligations and whether you're prepared to offer your customers the same right to walk away. -
Force Majeure Protection
Events - such as pandemics, supply chain disruptions, adverse weather or regulatory changes -can impact service delivery. Ensure your force majeure clause provides effective protection by covering relevant events and clearly outlining the protections available to you when circumstances are beyond your control.
Final Thoughts
Your standard T&Cs should reflect the unique risks and needs of your business. Regularly reviewing and updating them can help prevent costly legal issues and ensure smoother customer relationships.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
