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Setting terms and conditions for sale of goods

It is advisable for every business to have written terms and conditions for sales that form a contract between client or customer and seller. T&Cs are referred to under a range of titles including terms of trade, terms of sale and sale contracts, among others.

The main aim of terms and conditions of sale is to protect your rights, reduce your liabilities and offer you security when selling goods or services.

Although many businesses make sales without T&Cs being agreed, arising disputes when things do not run smoothly can result in a vast loss of time, money and in some cases, reputation.

To ensure your company is not tainted by such controversy and problems, a simple yet comprehensive set of terms and conditions of sale will clearly outline the agreement between buyer and seller

Contracts of this kind that are too wordy can lose their meaning so it is best to keep them clear, concise and comprehendible.

At the very least, your T&Cs should cover the following issues, regardless of how obvious these may seem:

• Cost - that is the price of the good or service on sale. This should include all provisions for increase, perhaps providing a clause that allows price changes from time to time.
  
  
• Delivery and arrangements - how and when you will provide the client with the goods or services. Avoid using meaningless terms, such as "we will try to get it to you within 24 hours" but opt for more definite clauses, or avoid those which are unnecessary altogether.
  
  
• Payment terms - these are the payment provisions of how and when you expect to be paid. It could include a discount for clients paying in one lump sum, or stipulate ways they can pay over a set period of time. It might also take into consideration whether cash, cheques or credit cards will be used for payment.
  
  
• Credit limits and credit periods – this refers to how long you are willing to wait for payment and if a credit period is not agreed, the legal default duration of 30 days kicks in. You might also write in a clause that allows you to charge an interest rate on late payments or claim compensation for debt recovery costs.
  
  
• A commitment to quality - this is where liability comes into play. It refers not only to ensuring the goods or services meet the description, but also considers your responsibility for delivery. It is necessary to align provisions here with that of the law, so that your client receives the appropriate goods or services they were ensured they would get for the price they were willing to pay.
  
  
• Data protection - familiarise yourself with the Data Protection Act, which places strict policies on how clients' details should be handled. You may be required to inform your client of the ways you intend to use their information.

English law provides consumers with far more protection than businesses and if you are selling to consumers, it is vital you comply with the Consumer Protection (Distance Selling) Regulations 2000. Failure to do so could result in the local trading standards officer closing your business.

It is also worth noting that the terms and conditions of sale should protect you from suffering losses incurred by a risky client who tries to impose their own terms which are contrary to your rights.

Clients should be made aware of the T&Cs at the beginning of their relationship with your business, perhaps once you have issued them an estimate or quotation, or upon their first order.

To make clients aware of the terms and conditions of sale, you might also print them on common company documents, such as bills, receipts and invoices.

These points are meant as guidelines only. Lawpack's Terms and Conditions of Sale and Services eKit can help you to create terms and conditions easily and legally for your business. 

The Kit includes solicitor-approved T&Cs templates for sale of goods and supply of services, plus expert guidance on how to complete the template forms.

External links

• Business Link: Setting T&Cs

Published on: October 18, 2011

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