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Mind Your T's & C's

Article posted Monday 4th March 2019


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can be so focussed upon a sale that they fail to process orders using T’s & C’s, or they issue terms which are out of date or unsuited to the company's current business needs.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.

  • They avoid the time and expense of drawing up specific terms for each individual transaction.

  • They provide certainty that the company will be trading on broadly consistent terms that comply with the company's policies and         procedures.
  • They allow for standardisation of a company's contracting procedures, and for contracts to be handled and concluded by more           junior staff.

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:

  • Appropriate express warranties.  These will supplement the implied Sales, General and Administration statutory conditions, which       should be expressly restated in order to avoid any implication that they have been excluded by the express warranties.
  • Remedies for the buyer if the seller fails to perform, such as the right to:
    • terminate the contract and reclaim the purchase price.
  • A statement confirming exclusion clauses do not apply to deliberate breaches of contract.
  • An indemnity in favour of the buyer (for losses suffered as a result of breaches of warranty by the seller) and any other matters          which the buyer may wish to cover, such as product liability or intellectual property infringement claims relating to the goods.

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