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Why does my business need terms and conditions?

July 16, 2018


Terms and conditions are essential to running a successful business.  Why?  Here are 5 reasons:


Terms and conditions...


Create certainty


Your terms and conditions are a combination of:


a: your agreement with a specific customer about what product or service you’re selling, what the customer is paying for it, when you’re to deliver it and so on; and

b: all the terms that are common to all your customer agreements, for example your cancellation rights, your returns policy; your payments terms and so forth.


If these are all set out in your terms and conditions there’s no uncertainty about what the parties’ rights are.  This can save a lot of time and cost if a disagreement comes up.


This will also improve your customer relationships because they will know what to expect with timeframes, further charging, where their orders are and so forth. 


Reduce chances of being taken to Court


When there are clear terms a customer is less likely to make a claim against you.  Their lawyer will advise them that the terms of the contract are clear and a claim is unlikely to succeed.


Increase your protection


As a non-lawyer you’re interested in services, price, and getting paid.   But, there are a bunch of other terms you need to protect your business.  If you have standard terms that cover off liability, intellectual property, risk etc you can focus on the doing the work and getting paid.


Help you enforce your rights


Clear terms on payment default, security over goods supplied on credit and so on will enable you to make successful claims if customers do breach a contract.


Help you comply with your legal obligations


Consumer protection and trade conduct laws include the Commerce Act, the Consumer Guarantees Act, the Fair Trading Act, the Privacy Act and the Electronic Communications Act.  These Acts contain various requirements that businesses need to comply with when dealing with customer or other trader.  Having good terms and conditions will help tick these boxes.


If your terms and conditions weren't drafted by a lawyer in the last few years, or you don't have any at all it get in touch, because the best time to sort this is now!


Photo by Mike Wilson on Unsplash

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