Having good Ts & Cs for your business is super important and can save business owners a lot of money in the long run. You need to cover your butt so people you do business with understand what’s expected of them and can’t go back on their word.
Kiwis love DIY so here are 5 simple steps breaking down how to write terms and conditions for your business:
Step 1: Write a list of everything your biz does
Jot down a list of everything your business does including all the goods and services you sell. Also write down any standard terms you currently offer your customers. Consider these terms you’re offering – are they working for your business? Think about what other terms you’d like to have in order for your business to operate like a well-oiled machine. Now’s a good time to change things up that aren’t working in your business. Not getting paid on time? Consider asking for a deposit, or even upfront payment. Are you customers cancelling jobs or appointments a few hours before you’re supposed to meet? Well now’s the time to consider charging a cancellation fee.
Step 2: Think about what could go wrong
It’s a bit freaky to think about, but next to the list of things your business does write down all the potential things that could go wrong. Are there any potential dangers for your customers that could happen from using your goods or services? Write these down as it will be important to remember these things when you’re writing your disclaimer. It’s also important to think about difficult customers as part of this step. What problems have you come across with difficult customers before? Write these down too as it will be important to address these problems when writing your Ts & Cs.
Step 3: Write your Ts & Cs
It’s now time to get cracking on those Ts & Cs. Here are some things to include:
- Define the good and services you sell so people know what’s included and what’s not
- Define any other words your customers might read and think “what the….”
- Payment terms, including payment dates and what will happen if your customers pay you late, like charging interest
- Debt collection information, including that the customer will be responsible for paying any debt collection costs if they don’t pay their bill, including legal fees on a solicitor client basis and filing fees
- What you are responsible for
- What you aren’t responsible for
- What your client is responsible for
- Any refund policy
- Any guarantees you offer
- Delivery timelines
- Any other important timeframes your customers need to be aware of
- Limitation of liability clause (best to get some legal help with this one)
- How you deal with complaints and what happens if a proper dispute rears its ugly head (for example, you could make it clear that negotiation or mediation is your first port of call so you aren’t taken to court straight off the bat).
- A disclaimer about the accuracy of information on your website
- Make is crystal clear that by accessing and using your website your customers agree to your Ts & Cs
- You can change your Ts & Cs at any time
- How long the contract lasts and any minimum term
- How you and your customers can cancel the contract and how much notice is required
- Who owns the intellectual property in the things you create for your customers
- The law that governs the contract (like NZ law)
Step 4: Put yourself in your customer’s shoes and review
Pretend you’re a customer and read over your Ts & Cs. Make sure they’re written in plain English and are free from complicated and boring legal words. If something isn’t explained clearly take some time and set it out in an easy to understand way.
Step 5: Get a lawyer to do a final once over
It’s always a good idea to get your lawyer to give your Ts & Cs a final once over. Your lawyer has seen many things go wrong with their clients in business and will know the areas where you could find yourself in hot water. Lawyers are particularly good at writing disclaimers and limitation of liability clauses. This could potentially save you a bucket load of money down the track.
And then you’re done!
Now slap those Ts & Cs on your website and have a link to them at the bottom of every page of your site. While it can be a pain, it’s best to wait until you’ve had a customer agree to your Ts & Cs in writing before you start doing business with them. This can be done by your customer ticking a box on your website to say they’ve read and agree to your terms and conditions, or by having them sign your Ts & Cs.
Don’t forget to review your Ts & Cs every now and then – it is amazing how quickly they become out of date as your business grows.
Written by Claudia King. Claudia is a business lawyer at the rather non-traditional law firm Legal Beagle and she works with entrepreneurs and innovative businesses to help them do cool stuff and make their businesses more valuable: https://www.legalbeagle.co.nz/about/meet-the-team/highlight/Claudia