Terms and conditions, or T&Cs as they are sometimes called, are often hidden in a contract’s small print. But what are they? And what is a battle of the forms? This article discusses the importance of terms and conditions and how you can make sure your T&Cs are the ones that count in a contract.
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Helpful Definitions
Contract – a legally binding agreement between two or more parties
Termination Clause – terms within a contract which set out the grounds upon which a contract can be ended (terminated)
Mediation – a form of alternative dispute resolution which allows parties to meet with an impartial third party to negotiate differences and reach a solution to a dispute
(For further definitions, please see our jargon buster)
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What are Terms and Conditions?
Terms and conditions are a legal document that set out the rights and responsibilities of each party in a contract. If drafted correctly, T&Cs should provide clarity as to what is expected of each party and when, as well as setting out what happens in different situations. T&Cs should address key points such as:
* who is a party to the contract?
* when does the contract start and how long will it last for?
* what goods / services are to be provided, when are they to be provided and to what standard?
* is any money to be paid and if so, how much and when?
* how can the contract be terminated?
* what happens if one of the parties doesn’t keep to their end of the deal, eg. fails to pay?
(The above is not an exhaustive list.)
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Why should a business have Terms and Conditions?
It is not unusual for businesses to have T&Cs that are specific to them. Most commonly these would be for the supply or purchase of goods and/or services. Unsurprisingly, when a business has its own T&Cs, these will most likely to drafted in a way that is favourable to that business.
You could think of a business’ terms and conditions as its sword and shield – there to protect the business in its relationships with third parties. Not only can good T&Cs help a business relationship flourish, they can also help a business defend itself in the event of a claim, or provide grounds to bring a claim if things go wrong.
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What does Battle of the Forms mean?
A battle of the forms arises where two parties enter negotiations with the intention of entering into a contract, but each party wants the contract to be formed on their own terms and conditions.
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How do I enter into a contract on my terms?
This is often referred to as the ‘last shot’ doctrine. The terms and conditions which will prevail in a battle of the forms, and thereby govern the contract, are the terms and conditions sent last without objection.
A critical ingredient necessary for the last-shot doctrine to apply is that a counteroffer accompanies the provided terms and conditions.
For example: Where Party A sends their terms and conditions to Party B, and then the Parties enter a contract, Party A’s terms and conditions will prevail. However, if Party B had subsequently sent their terms and conditions with a counteroffer which sufficiently altered the agreement before entering the contract, their terms and conditions would have prevailed. The ‘battle of the forms’ would have been won by Party B.
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Can I guarantee that my terms and conditions will prevail?
Terms and conditions may include a specific term stating that the specific T&Cs will prevail over the terms and conditions of any other contracting party. This is often known as a prevail clause.
However, these clauses are not always effective as the terms and conditions must still be submitted immediately before entering a contract, along with a counteroffer.
In order to give a business the best chance of securing the ‘last shot’, it is a good idea to attach the business’ T&Cs to all standard pre-contract documentation. This includes quotations, specifications, order forms, order confirmation documents and any other pre-contract communications such as emails.
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How do I terminate a contract?
Before seeking to terminate any contract, it is advisable to to carefully review the terms and conditions in full. It is often worth seeking legal advice at this point as, unless it is done correctly, terminating a contract could open a business up to claim from the other party for invalid termination and breach of contract.
It is also worth remembering that even where terminated correctly, certain provisions contained within the contract may well survive. For example, confidentiality clauses often survive termination of a contract.
Where a dispute regarding a contract arises, parties can mediate as a method of resolving any dispute. This might allow alternative arrangements to be put in place or a settlement to be made which enables termination of a contract.
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How do I know if my T&Cs are okay?
Terms and conditions are like a good haircut – worth the investment! As tempting as it might be to try to draft your own, well written T&Cs will almost certainly save a business time and money in the long run (not to mention stress!).
Therefore, it is always a good idea to get your T&Cs reviewed by a solicitor who specialises in this area of law. A solicitor can tell you what shape your existing terms are in and what issues, if any, there are with the document that need addressing.
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How we can help
At Bailoran, quite literally, our business is protecting yours. We believe that the first line of defence for any business is ensuring they have effective terms and conditions that reflect their business needs. Our team has extensive knowledge in all areas of commercial law which enables us to draft accurate and thorough terms and conditions. We’ll happily take a ‘no-obligation’ look at your T&Cs and chat to you about what shape they’re in. We can also advise on where and when to supply your T&Cs so as to ensure success in the event of a battle of the forms.
However, we also understand that, with the best will in the world, sometimes parties to a contract will fall out. When this happens we can advise you on what your options are and the associated risks, including how best to terminate a contract in as hassle-free way as possible. We will always try to identify what it is that a client wants to achieve, whether that be securing payment, preserving the business relationship or ending the relationship. If the issues cannot be resolved, we will be there to help you bring a claim or defend any claim brough against you or your business.
We pride ourselves on providing exceptional client care so contract us today to learn more about how we can help protect your business.
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Get in Touch
This article does not constitute legal advice. If you need any help or further information in relation to terms and conditions or a contract dispute, please contact us via the website or on 0113 266 0735 to speak to one of our legal experts.