One of the constant challenges which I face as a commercial contracts solicitor is convincing potential clients to part with their hard-earned money to draft a set of standard Terms and Conditions for their business. Or even to review and update their existing ones.
OK, I make no bones about it: the drafting of contractual documentation such as T&Cs does not necessarily come cheaply if you are looking for (as you should be) a carefully-written, clearly-drafted, comprehensive set of trading terms. As well as managing your business’s legal risk effectively, they take due account of your organisation’s structure and resources and properly reflect the mechanics of your trading relationships with customers or suppliers. Furthermore, if the nature of your business creates additional complications for the draftsman - for instance, if you sell multiple categories of goods or services which need to be treated differently, or your business or products are regulated in some way - this will only add to the expense.
All of that said, the cost of putting your contract documentation in order, whilst undoubtedly an important factor, should not be not the sole criterion in deciding whether to instruct your lawyers. There are numerous reasons why it should be treated as an investment as opposed to a cost: here are some of the most compelling:
1. You will be managing your business’s legal and commercial risk much more effectively;
2. If properly drafted, your Terms and Conditions should serve you for many years, without the need for significant amendment. Of course, this is in the absence of any intervening changes in the relevant law or in your organisation's operations or structure. If your solicitor's bill is divided by the number of times they are used during their working life, or the value of the turnover earned from them over those years is calculated, the cost involved will in most instances look much less like an unwelcome expense and more like a sensible and wise investment;
3. It makes your organisation's business appear more professional in its approach, and will help to enhance its reputation;
4. Having a good set of T&Cs is likely to make your business relationships easier (and consequently less time-consuming) to manage;
5. If having a professionally-written set of T&Cs saves you from one single significant claim, or dispute with any of your customers or suppliers, the chances are that it will have paid for itself several times over. This saves you from the cost and liability of protecting your revenue, while also enabling you to enforce your rights. But perhaps most importantly, you avoid the stress, the drain on precious management time and the disruption to your business that invariably comes from being involved a major dispute. This is especially true if you are a small or medium-sized organisation.
The most important question to ask is not whether you can afford to have new or updated T&Cs, but whether you should take the risk of not doing so.