Terms and conditions for services

Most small suppliers have terms and conditions. Rather fewer can show that the customer agreed to them, and that is the point at which they matter. Terms that live on a website and are never referred to in the quotation or the order acknowledgement have a habit of not being part of the contract at all, which leaves the supplier relying on implied terms and on whatever the customer's own purchase order said.

The fix is procedural rather than legal. Send the terms with every quotation, refer to them in the acceptance of each order, and keep the record. Where a customer sends its own terms back, the exchange becomes a question of which set got in last, and that is worth noticing at the time rather than during a dispute.

Business to business only

These terms are drafted for a supplier selling services to other businesses. They should not be used with consumers. A consumer contract is governed by the Consumer Rights Act 2015, which implies terms that cannot be excluded, gives cancellation rights for distance and off-premises contracts, and treats unfair terms differently. Selling to the public needs a different document.

Two ways to charge, chosen at clause 5

Time and materials, or a fixed price. Keep the one you use and delete the other. The choice drives more than the invoice: on a fixed price the scope and the change control mechanism carry the commercial risk, while on time and materials the estimate, the rate card and the approval process do. Mixing the two wordings is the commonest drafting error in supplier terms.

The liability clause has a legal test to meet

Because these are standard terms, the exclusions and the cap at clause 10 have to be reasonable under the Unfair Contract Terms Act 1977. A cap set at a figure the business could not survive paying is not more protective than a realistic one; it is likelier to be struck down, leaving the supplier with no cap at all. Set it against the fees under the contract and against what the insurer will actually cover, and keep the carve-outs the law requires for death, personal injury and fraud.

What else is in there

Ownership of intellectual property in the deliverables, confidentiality, data protection, suspension for non-payment, termination and the consequences of it, and the boilerplate that decides how notices are given and which law applies. Where the services involve processing personal data on the customer's behalf, Article 28 of the UK GDPR requires separate terms, which the data processing agreement provides, and where service levels are promised the service level agreement is designed to sit alongside these terms.

For a contract that is high value, that carries an indemnity, or that is being signed on the customer's paper rather than yours, our commercial contract solicitors review it on a fixed fee.