Standard terms and conditions—advantages and disadvantages
Standard terms and conditions—advantages and disadvantages

The following Commercial guidance note provides comprehensive and up to date legal information covering:

  • Standard terms and conditions—advantages and disadvantages
  • Purpose of standard terms and conditions
  • Importance of standard terms and conditions
  • Advantages of using standard terms and conditions
  • Disadvantages of using standard terms and conditions
  • Advising clients on whether it is appropriate to use standard terms and conditions
  • Business to business transactions
  • Business to consumer transactions

This Practice Note considers why businesses use standard terms and conditions (T&C, Ts&Cs, T&Cs), when trading with either other businesses (business to business or B2B transactions) or consumers (business to consumer or B2C transactions). It will allow the practitioner to analyse the client's position and advise whether standard terms and conditions are appropriate for the client.

Purpose of standard terms and conditions

Businesses use standard terms and conditions for many reasons, including:

  1. speed

  2. consistency

  3. cost, and

  4. allocation of risk

It is essential that businesses understand the need to enter into written agreements where possible and to adopt standard written terms that are pertinent to their particular business or trade.

Importance of standard terms and conditions

Standard terms and conditions, if used correctly and duly incorporated, are fundamental to income generation. They should form the basis of all contracts and provide a framework for day-to-day operations as well as protection in contractual matters. However, businesses often overlook their standard terms and focus on generating revenue.

Individuals within a business may find themselves using standard terms because they are there and do not necessarily understand their meaning or impact, or they might question their origin or relevance to the transaction or the market place, and as such fail to recognise their importance.

On occasions the need by the business to secure revenue quickly may