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Risk transfer, by way of an insurance policy, offers valuable protection to businesses, and forms a crucial part of corporate risk management. However, one important aspect of risk reduction that is often given a low priority by companies is the use of standard terms and conditions (T’s & C’s).
Without due consideration and controls, sales departments can be so focussed upon a sale that they fail to process orders using T’s & C’s, or they issue terms which are out of date or unsuited to the company's current business needs. If sales staff are not following proper contracting procedures, they may sometimes not even be contracting on the company's own terms, because purchasing departments have succeeded in substituting their own.
What are the advantages of using standard T’s & C’s?
From the Sellers perspective:
The objective from the seller's point of view is to protect the seller, so far as possible, by introducing terms favourable to itself in a format that does not encourage heavy negotiation.
From the Buyer's perspective:
The objective from the buyer's point of view is to protect the buyer, so far as possible, by extending the liability of the seller and maximising the extent of the losses recoverable by the buyer if the seller fails to perform. The buyer will therefore consider including: