Terms of business: key considerations

Terms of business set out the basics of your relationship with your client. They state your obligations to each other and must be effectively incorporated into your relationship.

  •  How do you engage clients and provide your terms?
  • Online (through your website, or by email)
  • By clients completing an order form?
  • By agreeing a specification or scope with your client?
  • Do you sell to one or the other, or both? Separate terms might be needed for consumers and businesses
  • Consumers are protected by consumer law, which restrict what you can include in your terms, and make you set out certain consumer rights
  • Businesses may want to negotiate your terms, making compromises in the terms might avoid this
  • Consumer terms generally use simpler wording.
  • Will there be any intellectual property you want to protect or which is developed as a result of your relationship?
  • Do you retain all ownership of the intellectual property?
  • What rights do you grant to clients to use them?
  • Does the client provide any intellectual property?
  •  How (and in how much detail) you will set out, or agree, the specification
  • Will you agree specifications or statements of work on a case-by-case basis?
  • Are there any deliverables?
  • Any approval/acceptance process?
  • Fixed or time and materials?
  • Extra rates for overtime?
  • For day rates – how many working hours? Do you pro-rate or charge for half-days?
  • When and how will you increase fees?
  • What expenses you will charge for?
  • Do you lock clients in for a minimum term?
  • Does that term automatically renew?
  • How much notice is needed to terminate?
  • Are you prepared to give a warranty in relation to the services?
  • Are the warranties subject to any conditions?
  • What procedure do clients go through if they claim under a warranty?
  • What specification or details will apply to the goods, and how they will be provided to the client
  • What the client can do with the goods if they only pay after receiving them
  • What conditions or guidance you might have around use or storage of the goods
  • How delivery (and risk in transit) are dealt with
  • When does title to the goods pass?
  • If any goods will be made to order.
  • What is the price of the goods?
  • How and when is payment expected to be made?
  • Do you want to be able to vary the price of the goods from time to time?
  • What expenses you will charge for?
  • Term and minimum commitments