Lesson in Business Contracts: Those Tricky “Terms and Conditions”

I have had several business clients come to me about a dispute they were having with some type of service provider.

After hearing their story, invariably my first question is always the same “what does your contract say?”

They usually send me over a one page document.

Pretty simple, right?

Not necessarily.

In standard business relationships the contract governing the parties’ relationship is often a simple Purchase Order or invoice. However, often the one page contract incorporates a separate “Terms and Conditions”.

These terms and conditions are truly the heart of the agreement- they govern what you can (and cannot) do in a dispute.

Two general comments about “TnCs”

1. The “TnC” document should be reviewed carefully before you decide to enter into the business relationship. Like all contracts, the “TnC” allocates risk. You need to think prospectively – ask yourself “in the event something goes wrong in the business relationship am I willing to accept the terms proposed in order to resolve the dispute?”

2. If your business has standard purchase orders, consider incorporating a “TnC” document. For example, do you transact business in other counties, states, or countries? If so, you may want to include a jurisdiction and venue clause.

Extreme Example: non-disparagement provision.

I recently read an article in the ABA journal about a web retailer’s terms of use- see the article: http://www.abajournal.com/news/article/customer_zapped_with_3.5k_charge_for_critique_of_web_retailer_its_terms_of_/

Apparently, the customer did not read the business’ terms of use. That turned out to be a mistake.

Customer was dissatisfied with the product and posted a negative review online.
When she went to complain about the product, she was hit with a claim for damages for violating the

non-disparagement provision

in the terms of use.

This article raises a lot of unique legal questions, but it certainly reinforces my two comments above:

1. Read the terms of the agreement before accepting. You might find yourself agreeing to some condition that you otherwise never would have agreed to.

2. If certain terms are important to you, include them in your own “TnCs”

Questions? comments?

Email: Jeshua@dwlawpc.com
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