We live in a digital age, where business is being done at an ever quickening pace. Integral to our lives is the power of the internet and email. With more and more business transactions being complete by email, we have been seeing an increasing number of disputes about terms and conditions of business. Often there are concerns whether a valid contract exists and if so what terms were agreed.
With email playing such an important role in the formation of business transactions we thought we would highlight some of the pitfalls with tips for avoiding them.
Written contracts and signatures
Use standard terms
Contain terms in one document
Make sure the terms are clear
Make all terms visible
Use ‘subject to contract’
Don’t start work before agreement is reached
Most contracts can be formed without signatures and need not even be in writing. Where writing is used, contract formation can be achieved by a simple exchange of emails.
This means it is easier than you might think to become tied to an unwanted obligation such as a loss-making project or a subscription to a service that does not meet your needs. Here are a few tips for avoiding these pitfalls.
If you have standard terms of business then before taking on business send the terms to the customer or provide a link stating that the terms will apply to the business.
For certainty/clarity, if you do not have standard terms try, at least, to have all agreed terms in one email or document.
Make sure what is expected on both sides is set out, specifying the deliverables and payment terms. The more precision, the less scope for dispute later.
Very imprecise terms could result in no enforceable contract or parts of it being unenforceable.
Do not agree or attempt to make customers agree to terms that are not visible such as unpublished policies, standards and criteria. Make sure these are referred to in your agreement and are sent to the customer before the contract is agreed.
If you do not wish to be bound to a contract whilst negotiating potential terms (especially when proposals may change before agreement is reached) head emails ‘subject to contract’. In most cases this will mean that you will not be bound to a contract. When you are ready to take on the business stop using ‘subject to contract’ and set out all the proposed terms you are willing to agree to.
If practicable, defer starting work on the project before it is clear that an agreement has been reached.
If a customer gives you repeat business be sure to point out at the start any terms that have changed since the last project and record any change in the scope of the work.
When transacting business with consumers there are regulations that must be complied with.
Should you wish to discuss how Genus Law can support your business or if you need assistance in resolving a dispute, please contact us on 0113 320 4540 or e-mail email@example.com
Matthew Greenberg is a dispute resolution consultant at Genus who acts for clients in litigation and represents them at mediation.