The Standard Terms are potentially the most important document in your business. They should create a contractual and legally binding relationship between you and the other party and set out the terms on which you do business. The Standard Terms normally sets out a number of key contractual rights and obligations which must be adhered to by both parties, as well as the consequences if the provisions are broken. The Standard Terms therefore give increased clarity and understanding between the parties such that there are, hopefully, no or few disputes.
The key provisions normally found in the Standard Terms are a description of the goods or services, payment, delivery, limitation of liability, insurance protection, and governing law. It may also include a mechanism for the resolution of disputes. It is fundamentally important that the parties agree these matters before they conduct business. Standard Terms are not relevant in all situations and we might recommend a tailored contract, for example, with high value goods or services, or complex arrangements.
In order for the Standard Terms to be effective, we strongly recommend that they are signed by the parties, and hopefully this will avoid a ‘battle of the forms’. A ‘battle of the forms’ is when each party tries to make the transaction subject to their own Standard Terms, and can arise, for example, by each party sending out emails attaching their own Standard terms. This obviously causes confusion and a lack of clarity and in the event of a dispute can cause even more problems.
Standard Terms are extremely important for any business and consequently we advise that you have them in place if you don’t already. In addition, remember to get them updated from time-to-time.
If you require further advice on Standard Terms please feel free to contact the corporate team at Whitehead Monckton.