Terms and conditions, whether they apply to the sale of goods or services, are the backbone of most businesses as they explicitly set out the level of responsibility that will apply to both parties. However, many businesses fail to incorporate their terms and conditions into their contracts and are therefore not afforded any benefit or protection provided under them.
When businesses are dealing with each other, usually they send each other a copy of their terms and conditions during the course of negotiations before entering into a contract. When a contracting party attempts to incorporate its own terms and conditions into an agreement it creates a situation often referred to as the ‘battle of forms’. To decide whose terms were incorporated and actually apply, a court will have to analyse when the contract was concluded and whose terms were incorporated at that stage. The battle will often be won by the contracting party who last put forward their terms and conditions which were not explicitly rejected by the recipient.
So how can a business try to ensure that its written terms and conditions become part of its contractual agreements?
When were the T&Cs sent?
If a business sends out its terms and conditions after the point at which a contract is formed, then they will not form part of any contract (unless the business can rely on previous dealings with the other party). Many businesses will commonly try to rely on terms and conditions set out on the back of any invoice. However, an invoice is usually considered a post-contractual document and so the terms and conditions will not be incorporated.
Have you obtained signed copies?
A business should ask the party it is intending to contract with to sign a copy of its terms and conditions and explicitly declare that they are to apply to all dealings between the parties. Alternatively, a business should seek some other written confirmation that its terms and conditions apply to dealings, such as an email or a tick box confirming this.
Are the T&Cs referred to elsewhere?
The terms and conditions may be incorporated by being referred to or printed on in the contractual agreement between the parties. For example, a customer may sign an order form which states that the suppliers terms and conditions apply and such terms are either attached or are said to be found at a specified website link.
Have there been previous dealings?
If a business has dealt with the same customer and it has previously provided its terms and conditions to that customer, it may be able to argue that any further dealings with that customer were on the same terms and conditions.
What about the parties’ conduct?
If a business provides its terms and conditions to the other party and, whilst they have not explicitly accepted or rejected them, the parties conduct themselves in a manner which shows they have been agreed, then conduct of the parties may be evidence that the terms and conditions of the business formed part of the contract.
Whilst having a set of terms and conditions is essential for any business, referring to them in a slapdash manner carries the risk that they will not be incorporated into the contract and that business finds itself subject to the terms and conditions of the other contracting party.
If you have any questions about the incorporation of your terms and conditions, please contact Henry Nelson-Case at [email protected] or any member of the commercial team.