Are your agreements and Terms and Conditions in order following COVID-19?
Updated: Feb 8
7 useful checklist tips for highly effective businesses
In modern business, and indeed life in general, Terms and Conditions documents are everywhere. Whether you’re signing up to a website or buying a house, you’ll be faced with Terms and Conditions. But are your Terms and Conditions in order and will they cover your business in the event you need to refer to them in future?
As we move forward into the ‘new normal’, now is the time to begin looking ahead at your business and how you can plan for the months ahead.
In order to protect your company from liability, it’s vital that Terms and Conditions (“Ts & Cs”) are appropriate for your business services and product delivery. At Serenity Law we can provide you with a range of commercial legal services to help advise and help you get your business in the best place post-lockdown.
Terms and conditions are used for several key reasons, including:
Defining the contract
Setting out business procedures
Protecting your and your business' rights
Limiting your liability
Keep reading to discover our checklist of seven useful tips for highly effective businesses to move forward in 2020
1. Ensure your Ts & Cs encompass every area of your business and the products/services you provide
Your Terms and Conditions set out the process and procedures on how you conduct your business with the end user, your customer. It is the agreement between you and your customer for the supply of your goods or services and regulates your business relationship.
When drafting your Terms and Conditions documentation, the Serenity Law team use simple, clarified terms to ensure we leave no stone unturned when covering every aspect of the service your business provides. Once the Ts and Cs are accepted by your client or service user, the agreement becomes a legally binding contractual agreement. By ensuring that you have covered all possible bases, you are limiting the possibility of your company being found liable in the event of a legal claim.
2. Include all responsibilities and rights of both your company and your service users/customers
It’s vital that your Ts and Cs incorporate the responsibilities of your company, for example, how you’ll use data collected in line with GDPR. This enables the user to make an informed decision about whether or not to proceed with the agreement. Your terms should also comprise of the requirements of the user. In this case, you may detail how your website can be used or when and how payments should be made. By detailing each and every requirement of both parties, the terms of the agreement cannot be ignored at any time throughout the commercial relationship. Furthermore, with the ‘new normal’, consideration should also be made to delivery terms, including shipments, method of delivery and timescales, see tip 4 below.
3. Detail any exclusions and limitations of liability or warranty within your documentation
Your Ts and Cs document is the optimum place in which to detail any exclusions and limitations of liability your company. An example of a generic clause may read:
“The Company is not liable for any injury, loss, or any direct, indirect, incidental or consequential damages of any kind, including, without limitation lost profits, lost revenue, lost savings, loss of data, replacement costs, or any similar damages.”
Should your company offer a warranty for a product or service you provide, the limitations of this warranty are also to be detailed within the Ts and Cs. For example, if a mobile phone receives water damage, the warranty may be invalidated under the Terms and Conditions of purchasing from your company. At Serenity Law, each Terms and Conditions agreement we create is bespoke and tailored to your business and industry sector needs.
4. Highlight all product/service delivery terms with circumstances in which normal delivery may be impacted
Whilst your company is likely to adhere to delivery terms laid out in your Ts and Cs in the majority of circumstances, it’s vital to highlight that these terms may not always be possible in order to manage the customer expectations. The economic climate, Brexit and COVID-19 are examples of circumstances which are unavoidable but greatly impact upon delivery of products and services in almost every industry. Your Ts and Cs should leave room for variation in exceptional circumstances.
When conducting business within the UK or internationally, consideration should be given to the ‘new normal’. The logistics of how services can be delivered and when products can be shipped considering the slow ease of lockdowns across the globe, should be considered. Whilst the global supply chain is affected, there is likely to be a time delay and additional cost to get the economic system moving again.
If you are pivoting your services to be delivered in a different way, for example with the use of technology, your current terms should be reviewed. If your current Ts and Cs do not provide for this method of delivery a review and redrafting of your existing Terms and Conditions can be provided by the team at Serenity Law, click here to connect with a member of our team today.
5. Avoid the need for lengthy court litigation
In some cases, customers aren’t aware of alternative dispute resolution processes. In others, the customer may prefer to, or be advised to, jump straight into lengthy court litigation. Not only do court proceedings take a considerable amount of time, but the costs mount quickly.
If your Terms and Conditions are watertight, the customer themselves may be forced to pay your legal costs after going straight to court, but this can be avoided. By detailing a clear dispute resolution procedure for all parties, disputes can be resolved by using procedures such as mediation or arbitration, instead of resorting to court litigation, ensuring time, money and reputation can be preserved.
Living in an economically interconnected world, the slow ease of the lockdown and the realisation of how the ‘new normal’ will affect various industry sectors across the globe. As such, consideration should be made on how any disputes can be resolved without delay. Jurisdiction, governing law and arbitral/mediation institutions should also be considered for, in particular, product-based businesses who rely on products from other jurisdictions. China, for example, produce 20% of the world’s manufacturing output and is home to key players in many supply chains worldwide.
6. Protect your intellectual property and control how it can be used by others
Many businesses have Intellectual property (“IP”) protected, it is a valuable asset to any company and the Terms and Conditions should ensure that it’s protected effectively. IP refers to your rights to creative works, inventions, designs, names, logos and slogans, there are many ways to protect your IP under the law.
Should intellectual property not be adequately protected, third parties are able to infringe, alter or misuse something that isn’t rightfully theirs. For example, a company may hold a patent for a product they have designed and created. Should a third party take this precise design and recreate it with lesser quality, this would be an infringement on the protection of the IP and could affect the owner’s reputation negatively.
Over the years, two of the biggest names in technology have fought backwards and forwards over their intellectual property. Apple inc. and Samsung Electronics Co. Ltd have famously taken legal action against one another over the style and performance of their mobile phone and tablet designs, each stating that the other is infringing their IP. More recently, Sky PLC brought proceedings against Skykick UK LTD over the alleged infringement of their EU trademarks and a national UK trademark belonging to them. Skykick countered this by attacking the validity of Sky’s trademarks. Earlier this year, the Court of Justice of the European Union (CJEU) ruled that Skykick’s validity attack wasn’t to upheld.
One way to control the use of your IP is to include a clause in the Terms and Conditions, this will ensure there are clear boundaries that will help to prevent infringements and preserve your interests should you wish to pursue a legal claim.
When customers visit your website or purchase a product, you should inform them of their rights and obligations regarding your intellectual property and the geographic areas and jurisdictions covered by your IP, as each jurisdiction has different protections and laws in some circumstances. For further information on our IP services click here.
7. Specify your payment terms in advance
Payment terms are a vital component of a company’s Ts and Cs. The terms can state the period in which you must pay for the goods or services, with late interest and charges to be charged for late payment in accordance with the terms of the Late Payment of Commercial Debts (Interest) Act 1998 at the rate of 8% above base rate.
In light of the ‘new normal’ and COVID-19, it would be advisable to review any existing terms of payments with customers. As you pivot your business, it is advisable to review your terms based on your industry sector and business services/products.
When creating or amending your company’s Terms and Conditions, we recommend seeking legal advice. Contact a member of our team for a free consultation or call us on 0800 0197773 to draft or amend your existing Terms and Conditions.