Most businesses routinely enter into contracts with other businesses for the sale or purchase of goods or services.
It is often advisable to operate to structure your contracts so that they contain an individual part (e.g. confirmation of acceptance of an order) in which you identify the specific matters in relation to the transaction and a generic part which contains your general terms and conditions of sale (or purchase as the case may be).
The main purposes of your general terms are:
- To present the inflexible terms under which you will accept business; including;
- To define the contract;
- To define your business procedures including delivery, quality, and complaints;
- To protect your business and your rights;
- Exclusion or limitation of your liability.
Terms and conditions should be tailor-made to your business depending on the specific nature of the goods or services to be supplied or where both goods and services are to be supplied.
Often when two companies deal with each other in the course of business, they will use their own terms and conditions. Typically these terms conflict (e.g. both parties include a liability waiver in their form) and yet offer and acceptance are achieved forming a binding contract. The battle of the forms refers to the resulting legal dispute of these circumstances, wherein both parties recognize that an enforceable contract exists, however they are divided as to whose terms govern that contract.
When you operate internationally it is even more important to have a set of well drafted terms and conditions in which you address additional issues such as delivery terms, insurance where to go to court in case of a dispute (jurisdiction) and which country’s law should be used (applicable law).
