Featured Client

Mark Kemp of The Gallery Partnership

The Gallery Partnership 

www.gallerypartnership.co.uk

"We had a requirement to radically overhaul our terms and conditions for a new website design and build service. 

We approached Shainul Kassam at Fortune Law with a fairly loose idea of what we needed and were fearful that we would be bombarded by lots of legal jargon.  We appreciate as a technology company how important it is to communicate in a non technical way to clients.  This is something that Fortune Law thoroughly understand, they rapidly grasped the concepts of what we required, as opposed to what we were asking for!

They gave us an estimate for the work, we said ok, almost the next thing the work was completed with minimum fuss, on time and within the estimate, what more can you ask of your legal adviser?

A joy to work with."

Terms and Conditions (T&Cs) are a crucial document for running your business.  They set in stone the relationship between you and your clients or customers and protect you in the event of a dispute with them.  T&Cs can define the exact nature of the goods and services you provide and precisely when you should get paid.  They can also provide flexibility to the parties so as to adapt the nature of the relationship in accordance with changing requirements.

Whilst it is impossible to cover all the necessary points in detail, here are our Top 10 Tips for T&Cs:

1.       Ensure they are actually agreed: to avoid a potential conflict, it is best to get confirmation that your T&Cs will apply, not those of the person you are doing business with, whether that means "Click to Accept", asking for a signature or confirmatory e-mail. 

2.       Properly define your Goods and/or Services: particularly important if you have a technical offering, ensure that both parties know exactly what is being supplied and avoid vague descriptions.

3.       Get paid: the most important clause should specify exactly how and when you will be paid.  Title to goods should be retained until this has occurred and you should have the right to cancel the contract where payment is not made.

4.       Comply with the Distance Selling Regulations: if you sell goods or services by 'phone, by e-mail, on a website, or by another "distance" method, you must comply with these regulations.  Of particular note is that you must inform your customers of their right to cancel the contract within a seven-day cooling off period.

5.       Be aware of implied warranties: whilst you might want to exclude your warranties as far as possible, there are limits to what you can do.  For example, in a sale of goods in the course of business, there are implied warranties that the goods are of satisfactory quality and are fit for the buyer's express or implied purpose.  In a supply of services contract, you must carry out the work with reasonable skill and care.

6.       Be fair: where you are dealing with consumers or on written standard T&Cs, any exclusion or limitation of your liability is subject to the standard of reasonableness which, if not met, will make the clause unenforceable.  Taking this further, standard T&Cs for use with consumers generally must also be fair in their entirety.  The customer's attention should also be drawn to the limitation of liability clause.

7.       Don't hurt anybody: you cannot exclude or limit liability for death and personal injury resulting from negligence.  Such a term is invalid.  You can, however, exclude or limit your liability for other damage or loss caused by negligence so far as it is reasonable.

8.       Ensure you're insured: where you are unable to exclude or limit your liability, or decide to cap it at a certain amount, make sure you refer to the level of indemnity under any relevant insurance policy and make sure you have the right insurance. 

9.       Protect your intellectual property: particularly in a business to business contract, it is essential that any IP in your goods or services is protected.  Ensure that you retain ownership and try to get an indemnity for any infringement.  Where the customer is reselling or adapting, extend that indemnity to infringement of third party IP.

10.   Prevent unauthorised changes: include a clause which states that any variation of the contract between you and your customer or client must be in writing.  This will prevent variation by mistake in a 'phone call or e-mail without any clear evidence if a dispute then occurs. 

11.   Specify the law and jurisdiction: where selling products overseas, make sure that English law will apply.  Where products are delivered or services performed can decide where the contract can be enforced.  Include a specific law and jurisdiction clause.

If you do not have written Terms and Conditions or want to have your current ones reviewed, please take advantage of our Terms & Conditions special offer at the bottom of the newsletter.

For further information or advice on any matter relating to setting up a new business, please do not hesitate to call us on 0207 440 2540 or email us at enquiries@fortunelaw.com

You may consider that this topic does not affect your business.  However, the Corporate Manslaughter and Corporate Homicide Act 2007, like health and safety legislation, has the potential to hold your business criminally liable for a failure to protect your employees and customers.  Are your health and safety policies up to date and do they cover all necessary activities?

Any organisation, and this includes a company or partnership, will be guilty of an offence if all of the following apply:

1.       The way in which its activities are managed or organised causes a person's death.

2.       The person's death is the result of a gross breach of a relevant duty of care owed to that person.

3.       The way in which senior management managed or organised the organisation's activities is a substantial element of the breach.

A "relevant duty of care" is owed to a wide range of people, including employees, contractors, agents, consultants, occupiers of premises, customers and clients.

If found guilty of the offence, the Courts can impose an unlimited fine on an organisation and may also force it to publicise the conviction, adversely affecting its reputation.

The first conviction

In February 2011, Cotswold Geotechnical (Holdings) Ltd was found guilty of the offence. 

An employee of the company died whilst taking soil samples for the bottom of a 3.5 metre pit on a building site.  The prosecution put forward evidence that the walls of the pit were unsupported and therefore collapsed burying and asphyxiating the employee.  The jury agreed that the company had failed to take all reasonably practicable steps to protect the employee from its unsafe system of work in digging trial pits; that these were unnecessarily dangerous and the company had ignored industry guidance which prohibited entry into excavations more than 1.2 metres deep.  In this case, liability on the part of the company was relatively simple to establish as there was only one director.

Sentencing

Although the Sentencing Guidelines Council had indicated that fines would start at around £500,000, the company, being small, was fined £385,000 and given 10 years to pay.

This case demonstrates the importance for businesses to have robust health and safety practices and procedures and to ensure that they are followed.   In smaller companies liability can be traced easily and therefore the chances of conviction may be greater.   

If you would like advice on your obligations under health and safety law, please do not hesitate to contact us on 0207 440 2540 or email us at enquiries@fortunelaw.com.