Terms and Conditions are Crucial to Your Business. Learn Why!

Terms and conditions drafted for your unique business will fulfil numerous functions. They will

Women's hand holding a white card with the words - Terms and conditions

Do you have your T & C’s reviewed regularly? Do you use them as a business tool?

  • protect your business
  • act as a tool to keep disputes to minimum
  • keep your business running smoothly

The Power of Terms and Conditions

Daniel owns a business manufacturing stainless steel kitchens for restaurants.

Crystal and Andre fit out restaurants.

Crystal and Andre send Daniel an email requesting a quote. They want Daniel to build the benches and shelves for a new restaurant they are fitting out. At the bottom of the email are Crystal and Andre’s standard terms and conditions.

Daniel sends Crystal and Andre a quote to supply the benches and shelves. On the quote are his standard terms and conditions.

Daniel negotiates with Crystal and Andre, and they agree on

  • price,
  • quantity,
  • quality and
  • time for delivery.

They didn’t think about the rest of the T & C’s in their documents.

Crystal and Andre send Daniel a Purchase Order again including their standard T & C’s.

Daniel delivers the shelves and benches to Crystal and Andre, and they accept them.

Chef in stainless steel restaurant kitchen. Did the kitchen installer provide the chef with a warranty for the benches. Did it have terms and conditions

If the stainless steel benches in the kitchen are faulty who will the chef have a claim over? The installer or the manufacturer? It should all be in the T & C’s.

Daniel didn’t discuss the T & C’s on the Purchase Order with Crystal and Andre. Did Daniel accept Crystal and Andre’s terms and conditions? Did he assume his terms and conditions still governed the transaction? Whose terms and conditions govern the transaction?

The T & C’s on Daniel’s quote benefited him. The T & C’s on Crystal and Andre’s Purchase Order benefited them. Both sets of terms and conditions are inconsistent with each other.

Luckily, nothing went wrong with this transaction. Daniel continued to work with Crystal and Andre. But, this behaviour is dangerous, and one day something might go wrong.

What Could Have Gone Wrong

Many things go wrong with transactions. For example:

  • the products could be defective
  • the customer might not pay
  • the customer might be late paying
  • damage might occur to the goods during delivery

Terms and conditions should cover all these problems and more.

What other terms could have been in conflict?

  • When did the title of the goods transfer to the buyer?
  • Who carried the risk for the goods during the delivery phase?
  • How long does the defect warranty last?

The uncertainty of whose T & C’s apply makes solving the issues more

Hour glass with pink sand and money - coins and notes blurred n the the background

It takes more time, money and effort to resolve an issue than it does to have T & C’s drafted and negotiated in the first place.

  • difficult
  • time-consuming and
  • expensive to resolve.

Time spent negotiating terms and conditions for a transaction far outweigh the

  • time,
  • effort and
  • money

spent resolving whose terms apply.

Terms and Conditions = A Contract

T & C’s of trade are a contract. For there to be a contract:

  • someone must offer to sell or do something
  • Someone must accept the specific offer.
  • if the exact offer is not accepted, then there may be a counter offer, i.e. the customer offers up their T & C’s.
  • By the parties continuing with the transaction, the contract is formed by conduct. Even though no one formally accepts an offer. It doesn’t matter which offer, that of the seller or the buyer.

What steps can you take to avoid T & C’s Uncertainty?

Don’t be in a position where you do not know which terms and conditions govern the transaction. Know what the T & C’s of the transaction mean.

Send each customer a “New Terms and Conditions of Trade”. Do this for both new and old customers. Make sure you have had these T & C’s drafted in clear, plain English. Use proactive contracts with examples, images, diagrams and timelines to help make them easier to understand. Send reminders to your customers about your terms and conditions especially when you update them. When you update your T & C’s put a notice on the front page of your website.

Get your customers to sign a copy of the T & C’s. Keep the signed copy of the terms and conditions, note when, where, how and who sent it to you. This note then becomes evidence if there is ever a dispute.

Refer regularly to your terms and conditions. During the transaction ensure they are followed. Sometimes your staff will think of an easier way around something. However, it may contradict your T & C’s and may cause a dispute. Use your terms and conditions. Don’t put them in a bottom drawer.

Put a copy of your terms and conditions on your website. Put the URL of the T&C’s on sales materials and other documents. Anything you give to customers and prospective customers should have a link to your T & C’s.

Draft a clause that states explicitly only your terms and conditions are acceptable. Any T & C’s put forward by the customer are excluded.

Make sure your

    • order confirmations,
    • delivery slips and
    • tax invoices

all refer to your terms and conditions in some way. Have delivery slips signed by the person accepting delivery.

Australian Consumer Law and Terms and Conditions

Take into account the Australian Consumer Law as unfair terms maybe unenforceable against:

  • consumers
  • small businesses.

Draft your clauses with your customers in mind.

Safety First. Avoid the T & C’s Risks

Knowing the terms and conditions of trade for a transaction can avoid disputes. Even though they do not have the word Contract at the top of the page, T & C’s are still a contract. Pay attention to the exchange of documents and emails with your customers. They might try to sneak their T & C’s under the radar.

Using your terms and conditions as a tool and knowing what the T & C’s of each transaction are will make running your business easier and safer.

When was the last time you updated your Terms and Conditions?

Download our e-book Six Signs Your Terms and Conditions Need a Makeover.6 Signs Your T&C's Need a Makeover

BLAB Small Business Talk Australia Websites

BLAB featuring Steven Brown

BLAB SMALL BUSINESS TALK AUSTRALIA WEBSITES

Don’t miss Etienne Lawyers’ next BLAB  Small Business Talk Australia  Websites at 4pm AEDT Sunday 8 November 2015. This week we will be discussing all things website related.

In case, like we were a couple of weeks ago – completley oblivious to BLAB, it is an app in which up to four people  have a video conversation whilst others watch and are able to interact by making comments or asking questions. We have jumped feet first into this new app and are loving it. Don’t be shy come and join us.

Now down to the matter of what will we be discussing in BLAB Small Business Talk Australia Websites?

Websites – Any thing and everything including:

  • Does every business need a website?
  • How is the best way to get a website?
  • What should a website cost me and how should I expect to pay for it?
  • SEO – what is it and why do I need it?
  • Marketing – a very big topic, having a website is great but unless people know you have one it is just a waste of money.
  • Breach of Copyright
  • Defamation – Your website makes you a publisher.
  • Are you responsible for the content users leave on your website?
  • Terms and Conditions of Use of Your Website
  • Website Privacy
  • Contracts
  • Trade Mark Infringement
  • Misleading and Deceptive Conduct

The points above are a general guide to our conversation but feel free to jump in and ask questions. We will BLAB for about an hour and it will be recorded. If you miss the live the stream it will be available at the same link. If you have questions that weren’t answered in BLAB Small Business Talk Australia Websites please contact our BLABbers offline for further information.

This weeks BLAB features James Cooke – Cooke Consulting @CookeConsulting, Julie Sanderson – Jacaranda Grove Consulting @jacarandagrove, Steven Brown – Etienne Lawyers @SteveBrown_  and Suzanne Brown – Etienne Lawyers @tbearetienne. Don’t forget to follow our BLABbers on Twitter.

BLAB Small Business Talk Australia Websites – Join the BLAB Here

BLAB All About Websites

 

DOWNLOADS

Etienne Lawyers FREE download – Is Your Website Legal? – 12 Ways to Use Photos Legally on your Website will help you to understand how to use photos on your website without fear of prosecution.

Images and graphics are powerful tools in your business. They will convert more customers than text alone. But if you are using those images illegally you could end up paying significant amounts of money, far more than you can imagine.

 

Is Your Website Legal? BLAB Small Business Talk Australia Websites

Get Your Free Download Now!

 

 

 

 

 

Buying Off The Plan – Filming for ICLE

 

Buying Off The Plan - Filming for ICLE

Buying Off The Plan

Etienne Lawyers was again asked to film a presentation for ICLE. Steven Brown’s presentation was focused on purchasers buying off the plan and developers selling off the plan. Steven has many years experience acting for both developers selling off the plan and purchasers buying off the plan. He understands the benefits and pitfalls from both the purchaser and developers point of view. Steven’s extensive experience in this area made him the logical choice for ICLE in presenting this area of law as training for other lawyers.

This is a very topical subject at the moment. With the Sydney skyline having more cranes than any other in the world except Dubai. Most of the buildings are new apartments. With interest rates low and overseas buyers being restricted to mostly new properties – new apartments are very popular. Also peaking interest in NSW is the First Home Owner Grant and First Home – New Home scheme offered by the State Government. New apartments can be cheaper than houses and land making them easier to satisfy the rules of the government schemes.

With property prices rising sometimes 10% a year developers can sell a property off the plan and not complete the building for 5 years. In that 5 years the selling price may have increased by $100,000.00 making it advantageous for the developer to decide not to sell to the original purchaser and put the property back on the market and sell for a higher price.

Buying off the plan has advantages for the purchaser but also disadvantages. There have been many examples recently in the media of developers withdrawing properties from sale, changing the size of lots, changing the fixtures and fittings, even reducing the number of bedrooms. All of this was discussed in Steven’s presentation.

There are proposed updates to laws being proposed by several State Governments.

To find out more about Buying Off the Plan, download our free reference here.

Linkedin for Lead Generation

James Cooke from Linkedin Success gave a fabulous presentation on using Linkedin as a Lead Generation Tool for Lawyers. James is passionate about using Linkedin as a lead generation tool and he conveys this passion in his presentations. His presentation was not only educational but practical and fun. James’ vast experience using Linkedin to generate leads for his Debt Collection business has enabled him to develop a proven formula that he now shares both online and in live presentations.

If you would like to learn about using Linkedin as a Lead Generation Tool for your business, why not try James’ free Udemy course

As always Alice from ICLE and Tristan from BAM Studios made the day of filming fun and productive.

Off The Plan Property Call To Action

5 Elements of Promissory Estoppel in Contract Law and Legal Agreements

Don’t Make Promises in Business You Can’t Keep

The court may decide you must uphold your promises even though you don’t believe you have entered into a contract or legal agreement. Promissory Estoppel is one of the elements of contract law that must be considered when drafting or entering into a contract or agreement.

Promissory Estoppel

Broken egg shells - broken promises. You can't break a promise in a legal agreement

A promise must normally be in a deed (legal agreement or contract) or supported by consideration to be enforced.  The principle of estoppel however may allow a promise to be enforced even though these requirements are not satisfied.

The development of the concept of “promissory estoppel” in contract law has led to the proposition that a court may decide that a “contract” has come into being even though the traditional rules for contract formation have not been satisfied.

The 5 elements of Promissory Estoppel are:

1.     Some form of legal relationship either exists or is anticipated between the parties.

A contractual relationship is the most common type of “legal” relationship. Parties to pre-contractual negotiations also fall within this principle.

2.     A representation or promise by one party.

Traditionally, estoppel could only be used with respect to a representation about an existing fact.  The High Court decision in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, however, extended the doctrine to representations about future conduct.  This type of “promissory estoppel” arises where the promise is given in circumstances that lead the other party to assume the promise will be performed.

3.     Reliance by the other party on the promise or representation.

The party relying on the promise must suffer a detriment

4.     Detriment

The party relying on the promise must have suffered some sort of detriment.  In other words, the party must be in a worse position for having relied on the promise.

5.     Unconscionability

There is no general restriction, which prohibits a person from breaking his or her promise.  Accordingly, before an action for estoppel will succeed, it must be shown that, in the circumstances, it would be unfair or inequitable to allow them to do so.

Remedies

Quote from Olex Focas Pty Ltd v Skodaexpert Co Ltd 1997The remedies available to someone who has relied on a promise to their detriment are equitable.  This means that the court has a discretion in deciding what to do and it will do what it can to relieve the detriment suffered.  The courts will not necessarily force the party to honor its promise, unless this is the only way to do justice.

When and How to Use Estoppel

A party seeking to raise estoppel must make out a clear case and show that it would be unconscionable for the promisor to go back on their promise.  Unconscionability is really the backbone of estoppel.

It is important to realise that failing to fulfil a promise does not of itself amount to unconscionable conduct, nor does mere reliance on a promise to a person’s detriment.  Something more is really needed such as encouragement by the party that the promise will actually be performed.

The principles outlined above should always be the starting point if estoppel is to be used.  The nature of estoppel, however, is such that it cannot be defined into simple elements.  At best, the principles are a guide as to what the court will look for.

Related

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