Have you found yourself constantly being forced to accept other companies’ terms and conditions (T&Cs), whilst yours are point blank refused?

Whatever the size of your business, you will undoubtedly have had dealings with one that’s bigger, or more powerful. And if yours is a small organisation, you may feel that you are always the underdog in contract negotiations. Is this your experience? Have you found yourself constantly being forced to accept other companies’ terms and conditions (T&Cs), whilst yours are point blank refused? If so, we can help.

We can’t promise the impossible, but we can give you some tips for good preparation, what to prioritise when exchanging T&Cs and share our advice for maximising the chances of a mutually beneficial contract.

There is no point placing undue emphasis on the minutiae of your terms or worrying about the “Battle of the Forms” if your sales team is routinely making deals and accepting customers’ T&Cs unilaterally. Though the adage may claim that an oral contract isn’t worth the paper it’s written on, this is not in fact the truth. If the elements of the contract are agreed verbally, especially if the other party is a regular customer and there is a “course of dealing”, the contract occurs there and then.

And that is not the only way that you can mistakenly enter a contract. Terms and Conditions are often sent with purchase orders or at the bottom of emails and it is all too easy to accidentally agree to terms that you aren’t fully aware of, potentially exposing your business to significant risk.

Good processes will help enormously with circumventing these issues. Train your customer-facing staff to know what constitutes a contract, how to avoid automatically accepting uncapped or unacceptably high liability clauses and when to pass a contract on for review. A good in-house lawyer can help you with this.

Determine whether the contract is worth the risk

By the time you have reached the stage where you are exchanging T&Cs, you should already have established what the contract means to you and what you are prepared to risk. Be pragmatic and remember the need for proportionality. Few contracts are worth betting the company for.

We would also advise that you seek legal help for contracts of high value, or for ones that are potentially complex. Maybe contractors or subcontractors are involved, in which case liability can become complicated, and it is important that you don’t end up ultimately responsible for another company’s work or product. And don’t make the mistake of thinking that your liability is directly linked to the value of what you have sold. The devastation and financial loss of a faulty component in a space shuttle, for example, is unlikely to be linked to its size or original value! We appreciate that this can be a difficult process so please do contact us if you would like our advice. Our lawyers are experts at examining contracts and have huge experience in supporting businesses to make important decisions about risk and liability.

Keep an open dialogue

It’s hard to make progress if you adopt an overly combative stance, and if your business is dwarfed by the other party, it probably won’t be a successful tactic. Communicating openly will serve you better. This should not be a punitive experience, so if you are being asked to accept wildly unreasonable terms, attempt to find out the reason. Perhaps the other party is unable to get liability insurance themselves, so are attempting to foist that cost onto you. Perhaps your question is met with stony silence. Or maybe, they are just using their standard terms and are not even aware of what they are expecting you to sign up to. Even if they continue to refuse to change their terms, the exchange will undoubtedly teach you something. One of our very experienced lawyers, Chris Parr, has a top tip to avoid hostility. If he spots something questionable in another party’s contract, he says, “Help me to understand”. The other party cannot take offence but must justify the inclusion.

Be pragmatic

There will be times when you have to recognise that you’re in a weaker bargaining position and your T&Cs will not be accepted wholesale. In these instances, when you won’t perhaps get everything you want, it is worth trying try to get nearer to your ideal position. Ask for clarifications to the terms that are most important to you. If you are close to finalising the deal, these may be accepted. A good lawyer should have some tactics in their armoury that will put you in the best possible position.

Be methodical

Nobody wants to think about conflict at the beginning of a contract, but you would do well to be prepared. Retain documents, log conversations, follow processes and familiarise yourself with the terms of your contract. Doing this will give your lawyer the best chance of pursuing your interests in the event of a dispute.

Our lawyers are senior lawyers who all have a wealth of experience in businesses of all sizes and will never be intimidated by the magnitude or reputation of the opposition. Having solved similar problems many times before, they have developed strategies and techniques to help bring about the best result for you. A junior lawyer simply does not have a comparably robust background to draw from.

Working within businesses also gives our lawyers a unique advantage over traditional law firms. Able to develop deeper relationships, they have the freedom to have honest conversations with the key decision makers, even if these throw up potentially difficult or uncomfortable issues. Client care is vitally important to us. We care about the businesses we support and always give advice based on what is best for you – pragmatic advice that considers your appetite for risk, rather than just legal information that covers our backs. A TLD lawyer will help you make informed, commercially sensible decisions, so you can genuinely answer, “Is this contract worth the risk?”.

Our lawyers can also help you to introduce processes that facilitate a quick review of the T&Cs you are being required to sign up to and provide training so nobody in your organisation inadvertently commits the business to something that is overly onerous or unrealistic to fulfil.

And if you are concerned that you cannot afford, or do not have the work for a full-time lawyer, our solicitors can support you on a flexible or part-time basis. Badged as your in-house lawyer, you will have the most effective legal representative you can have in your corner.

If you would like more information, or to discuss your legal requirements, please contact us for an informal chat.

The Legal Director