All too often businesses provide credit to customers without having terms and conditions in place to protect both them and the customer. There is no legal requirement to set out terms and conditions and it is rarely seen as a priority. However, having the right terms and conditions in place, clearly documented in writing and issued before any contract is entered into, ensures all parties understand the provisions of the transaction, their duties, rights, roles and responsibilities. Put simply, ‘if there is nothing in writing, there is no proof’, so terms and conditions are essential to safeguard your business.
The specific details of terms and conditions will differ depending on the services offered by each business, but consideration should be given to the following:
- details of the product or service to be provided
- payment terms
- any guarantees or warranties
- retention of title
- breach of contract and governing law
One of the most important aspects of terms and conditions is the payment terms, which should include when payment should be made and what will happen if payment is not made. Businesses have a right to claim interest on late payments providing this is specified in the terms and conditions. In these circumstances interest can be charged from the due date until full payment is received, along with any reasonable legal costs incurred should it be necessary to take legal action to recover the payment.
If you do not have terms and conditions, or your existing ones do not state that you are entitled to recover interest and legal costs, then you would be unable to claim these prior to court action. This does not affect any claim for interest and legal costs upon commencement of court action.
For limited company customers, businesses can include a requirement for a personal guarantee. This is where the director signing on behalf of the company guarantees to repay any debt that the company may be unable or unwilling to pay.
At David Allen Recovery Solutions we can provide you with terms and conditions which are tailored to your individual business requirements. For more information call Joanna on 01228 713070.
Posted: October 18th, 2017