This briefing outlines the key practical points to bear in mind when your business is entering into a contract as a supplier of goods and/or services with another business. It also includes a list of "Do's and Don'ts".
Do your terms apply?
Most businesses will have standard terms that are designed to govern the provision of goods or services which they typically supply to their customers. However, it is surprising how often businesses fail to take the necessary steps to ensure that customers are made aware of their standard terms. For example, if you are dealing with a new customer and the first time they see your standard terms is when you send them an invoice, they will have a good argument that your terms do not apply. This is potentially very damaging should you get into a dispute; among other things, it is likely to mean that there is no limitation on your liability if something goes wrong.
If you want your standard terms to form part of the contract, you need to draw them to the customer's attention before you are both committed to going ahead with the transaction and ensure they are incorporated into the contract. The ideal position is to get customers to sign a document which sets out the terms in full – but this is often difficult, particularly where both sides are keen to do a deal quickly or where documents are being exchanged by email. The next best approach is to ensure that your standard terms are included with any quotation you send and a statement is included in the quotation that the relevant supply will be governed by these terms. Keep a record of such communications so that you are able to prove that the customer was aware of your terms (otherwise it will be their word against yours should the matter result in a dispute).