Are your terms and conditions working for you?

In most instances, the answer is no. it is a simple tick box exercise. If we did, we might find some very bizarre clauses buried in terms and conditions. Some of the more notorious and humorous ones range from a zombie apocalypse clause to handing over a first-born child in order to use free public Wi-Fi. However the ‘small print’ is important, not just when signing up to an overarching contract with a third party, but for each and every contract for the sale and supply of goods and services that a business enters into.

When setting up a business there are many things to consider. It can be easy to overlook putting in place bespoke terms and conditions, and too often we see terms that have simply been copied and pasted off the internet. These usually provide little by way of protection and certainly do not make life easy once issues arise. And issues do arise. A few of the most common issues we see are as follows:

1. Who is the contract with?

One of the most important things to confirm when entering into a contract, and one which is surprisingly overlooked, is who you are entering into a contract with. Is it a limited company, an individual under a trading name, a partnership? Getting this right at the start will save time and money exploring this at a later date if there is uncertainty, and if any legal action against a counter-party is required. As a business owner it is important to understand where the liability lies should a complaint arise and it is your responsibility to ensure this is clear when you enter into each and every contract.

2. Where in the world?

Another common issue we see relates to jurisdiction – where do you operate? Northern Ireland, the Republic of Ireland, England, or further afield? These are all separate legal jurisdictions, so if a legal dispute arises, where would you prefer this to be heard? We often see clients who operate solely in Northern Ireland adopting standard terms and conditions that state legal disputes will be determined by the Courts of England & Wales, in accordance with English law. This does not make practical sense. If you are operating in Northern Ireland and if a legal dispute arises, you need to state clearly that your preferred location for a hearing is in Northern Ireland. Also, as a business owner, particularly if you operate across different jurisdictions, you need to give consideration to the practicalities of engaging in litigation and which jurisdiction might be more beneficial to your business.

3. Force Majeure

Another clause on which we have been increasingly advising since March 2020 is force majeure; In what circumstances might a contract be frustrated and who is responsible for the losses arising as a result? As you can imagine a number of high profile legal cases have been brought before the courts in the past year to determine this very question in light of the forced closure of business for some time. As difficult as it is to predict what problems could arise as a business owner you should try to build into your terms provision for the difficult scenarios and who will be responsible for the loss which might arise.

Businesses need to take some time to risk assess new customers and ensure credit control procedures are up to par. This simple exercise might well save you from uncertainty and litigation further down the line.

Eversheds Sutherland regularly advise and assist business clients with the drafting of their terms and conditions, ensuring these meet the needs of the individual business. This can take the form of updating existing terms and conditions, adapting these to business in a new market, or providing a full suite of terms.

For more information, please contact 

Matthew Howse, Partner in the Dispute Resolution and Litigation Department - MatthewHowse@eversheds-sutherland.ie

Emily Paisley, Associate in the Dispute Resolution and Litigation Department - EmilyPaisley@eversheds-sutherland.ie

Peter Curran, Head of Public Procurement and Partner in our Projects Group - PeterCurran@eversheds-sutherland.ie