How Should You Draft Ts & Cs For A Supplier?

Who Dictates Ts & Cs Rules?

Terms and condicitons, or Ts & Cs, vary from company to company, from supplier to supplier and from service to service. This is a document that’s more versatile than an employment contract. Whilst with employment contracts you need to follow legislation and governmental rules, when dealing with another company, a services provider or a freelancer, most of the rules are dictated by you and the supplier. But the document needs to be formatted in such a way that the law will be in your favour if something goes wrong. Equally, Ts & Cs will work in yours and the supplier’s favour if both parties abide by the rules set out in the Ts & Cs agreement.

First Thing’s First

Just like a good story teller immediately sets the scene when beginning to tell a story, you must start off by making it abundantly clear who are the ‘actors’ in the ‘play’ and what the ‘story’ is about. In other words, tell the reader of the document who is the supplier, who is the buyer, what services are being bought. Everything else about the document will be around the services, which will likely include access to the company system, database, cyber security and data protection. You need to make it clear what are the services and on which date will the services be expected to commence. Your supplier’s Ts & Cs should have the following initial backbone (everything else will fall around it):

• Name of supplier
• Name of client
• Services supplied
• Commencement date
• Payment
• Duty of care
• Termination notice
• Jurisdiction

Supplier and Client

You need to name the supplier and client. Yes, it’s obvious but not as uncomplicated as you may think. Who is the supplier? Is it a company or a person? If it’s a company, then the Ts & Cs are directed at the company, the invoice is addressed to the company and any liability will be the company’s responsibility. If you are a supplier, you are answerable to the person whose name is on the Ts & Cs. If you are the client or buyer of services, the supplier is the one whose name is on the Ts & Cs. In some cases, both company and individual name of supplier and client will be stipulated and almost set apart from the company. For instance, the company will pay for a supplier’s services but only an individual’s name is the named supplier. So… not as uncomplicated as you might think but crucial for the whole document and the supplier client relationship.

Services Supplied

Another obvious section of the Ts & Cs is the ‘services’ clause. You need to clearly state what the services are. Is it IT systems or is it website services? Is it marketing services and in relation to what? If it’s Google ads services, that doesn’t include social media. If it’s social media, all platforms in question need to be stipulated. An accountant may not be a bookkeeper. The services section needs to be very clear and a lot of thought goes into this section and so it should, in order to avoid future misunderstandings and conflicting discussions in relation to what falls under a supplier’s jurisdiction. If you don’t state in the Ts & Cs exactly what you expect from a supplier, you cannot demand that service.

Commencement Date

Yes, another obvious one. Often overlooked. But is the commencement date on the 1st of August 2019? Or is it on the 2nd of August 2019? What is the difference? 24 hours on an invoice. It’s that simple. If you don’t state the date, month and year as the commencement date, then your supplier could start immediately. You then are obligated to pay for the time already worked. If you are a supplier, you need to have this clarified so that you don’t waste your time.

Payment

The dreaded but inevitable fact is that if you buy services, you need to pay. Suppliers expect payment to be made within a certain time from the invoice date. Failure to make payment could force you to incur unnecessary costs. Undisputably, large companies will stipulate a payment deadline and if you are one minute late, you suffer financial consequences that are irretrievable.

But when it comes to SMEs and freelancers, although they lay down the rules, often they find themselves chasing for payment. Often they won’t dare to fine you for late payment, regardless of what’s in the terms of service. But they are people needing to make a living so, they should get paid, preferably on time. So our advice is that you think carefully about the ‘payment’ section and ensure that both you and your supplier benefit from the ‘fees’ and ‘payment terms’ clauses. These should include and clearly specify reimbursement of reasonable expenses incurred by the supplier.

Duty Of Care

Duty of care means cyber security, means data and identity protection, means intellectual property, means the safety of the company. Any confidential information should remain confidential. This means you don’t talk about it, you don’t disclose matters to anyone, possibly even inside the company. Confidentiality also means you don’t allow anyone to access confidential information you may have stored in your system and this includes data protection and identity protection. Duty of care is a lot broader and more complex than other clauses in Ts & Cs .

Termination Of Services

Termination of services could happen for any number of reasons: end of project, end of budget, lack of client satisfaction, lasck of supplier satisfaction, sudden unexpected turn of events. Ts & Cs need to state when services may be terminated – providing notice period. You may state that termination may be served with immediate effect or a notice period may be offered.

Jurisdiction

Final obvious one is the jurisdiction section. Where will courts settle any disputes or claims in relation to the Ts & Cs? Remember that England and Wales have different legislations to Scotland. You must state where jurisdiction will rule over the Ts & Cs. Will it be England or Scotland or the EU?

Please give us a call if you would like to discuss any matters relating to Ts & Cs with your suppliers or clients. Whether you are a supplier of services or a company relying on suppliers, we are happy and well equipped to help you with our personable services. SG

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August 26, 2019 at 9:00 am
Category: Contracts, Corporate Law

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