No matter how prudent you are, you may need to rely on your business terms and conditions for protection at some point. Having effective terms and conditions in place can mitigate potential risks from the start.
While we do not recommend that small business owners write the terms and conditions for their business themselves, and certainly not without seeking legal advice, we do want to provide some basic information about what should be included. This is to give you greater clarity and understanding about what is needed to protect you and your consumers.
For more information on writing small business terms and conditions, get in touch with Rose Lawyers. We’re committed to the small business owners of Melbourne and greater Victoria, and are here to answer any questions you may have.
Essential terms and conditions for your small business
In the hierarchy of starting a small business, outlining your terms and conditions of trade usually comes quite far down the list after more critical tasks like marketing and customer acquisition. Many business owners put off drafting the terms and conditions of their business and only consider them after there is a dispute, when it is usually too late.
Generally, your terms and conditions must include*:
- A clear definition of your products and services, including what will be provided and any payment terms.
- Warranty and guarantee information, including time limitations and any other limits.
- Delivery timelines and how to query deliveries.
- Dispute information if either party fails to deliver or pay.
- Refunds and returns information.
- How to manage the end of a relationship.
- Any terms of agreement.
- Notice periods.
- Privacy policies.
- Relevant laws that govern your contract.
*While these conditions are vital, they do depend on the business. Some will be relevant to particular businesses, while others won't be. For example, delivery timelines, and refunds or returns are not applicable to all industries.
You also need to make sure that your terms of business are either specifically agreed to by your customer, or that they are at least adequately brought to their attention or available prior to a transaction taking place. Depending on your business you’ll need to tailor your terms and conditions to your particular industry or service.
For example, if you are storing products as a service you'll want to include a clause about what happens if a customer's items are damaged while in your care. Conversely, a term like this would not be relevant for a web application product.
How terms and conditions can protect your small business
You can protect your small business if a dispute occurs. For example, if you don't identify payment time frames clearly and correctly, this may cause delays with payment which may affect cash flow and the viability of your business.
- Established terms and conditions means that parties are bound by their obligations.
- All parties will understand their duties.
- You can manage business relationships respectfully and clearly in line with your terms.
- Payment information in your terms and conditions means no more waiting on invoices.
- Clearly outlined information about how your products or services are delivered makes dispute management easier.
- Terms and conditions deliver peace of mind to your customers.
- Disputes are resolved more easily.
Consumer laws are there to protect your customers against unfair or misleading contracts or transactions, so you will need to be aware of this and to make sure your terms and conditions are appropriately worded. You may actually contravene consumer law or another statute with inappropriately worded terms and conditions, so it's best to consult a legal professional to make sure you're using correct terms.
Start thinking about small business terms and conditions
It’s helpful for your understanding if you think about how you want your terms and conditions to look, and what you want to include. Your business structure may dictate the way your terms and conditions are drafted, so be sure to consider this as well.
- Draft a list of everything that could go wrong with a transaction, and then identify how you would address each scenario.
- Consider your customer when thinking about the language you want to use, and how and where you provide your terms and conditions.
- Think about any copyright protections in place.
- Consider including a section on managing customer satisfaction, and how you can rectify disputes to maintain business relationships.
Remember to revise and update your terms and conditions at regular intervals, and to ultimately keep them simple. You want your small business terms and conditions to be as clear and easy to understand as possible. That way if you do experience a dispute, you will find it easy to manage with your consumers. If you have technical terms that are used within your business, define them in your terms and conditions so that anyone who reads them can understand everything.
Contact us for terms and conditions help today
At Rose Lawyers, we are committed to helping small business owners to protect themselves and their consumers. Our business lawyers can help you create effective terms and conditions for your business.
Enjoy peace of mind and protection that serves you well, call us on 03 9878 5222 for advice.