How to Unravel the Knots in Your T&Cs – Part 1
Every knot was once a straight rope
It’s one of those expressions that catches you off guard, when you first read it you do a mental double take until you figure out what it means. What it means is that at some stage your problem/challenge/issue never existed and now….it does. The question is, how do you return this “knot” back to its original state?
We often see people get tied up in knots over their Terms and Conditions. Many businesses do not appreciate that their Terms and Conditions are the foundation of their relationship with their Customers and set out the obligations and liabilities of both parties. When Terms and Conditions are outdated or poorly drafted, it sets you up for a very knotty relationship with your Customer.
We’ve listed the main pain points we see when it comes to having your Terms and Conditions drafted and we’ve come up with some solutions to get help you get your Terms and Conditions straightened up again.
Knot 1 – How Do You Know if your Terms and Conditions Need to be Redone?
It’s 2010. The first ever iPad was released. Tiger Woods returned to golf after a hiatus caused by “family issues” and 5 teenagers auditioned for The X Factor UK and formed the band One Direction. It was probably also the last time you had your Terms and Conditions reviewed.
No one likes to think that their business documentation is outdated or obsolete. It’s not unusual for us to hear things like “These Terms and Conditions have worked well for me so far” or “I haven’t had any major problems in ages.” But the cases that hit our desks are the ones where things didn’t work out so well and a few tweaks to documentation could have saved a lot of wasted time and money.
Things also move quickly in law land and new legislation is being passed regularly. Think the Personal Property Securities Act 2009, the Competition and Consumer Act 2010 (yes, we still often see references to the Trade Practices Act 1974 in Terms and Conditions) and the Australian Privacy Principles vs the National Privacy Principles.
If you haven’t looked critically at your Terms and Conditions since Prince William proposed to Kate Middleton, it’s time for a review.
Straight Rope Solution 1:
- Work out when your Terms and Conditions were last reviewed. If they haven’t been updated since you started in your current job, it’s good risk management to make sure you know that your Terms and Conditions cover you the way that they should;
- Try to review your Terms and Conditions from your Customer’s viewpoint. Are they fair or are they adversarial? Are they easy to read and understand?
- Check for any references for out of date legislation and procedural aspects that might have changed in your business e.g. updates to price lists, changes to return policies or privacy requirements.
Knot 2 – Getting Approval
You’ve now identified that your Terms and Conditions have some gaps, are outdated or just need a general “zhoosh”. But you’re going to need approval from your CFO, CEO or your manager. Most businesses have strict budgets and it can be difficult to get endorsement for legal spend, especially when the true value of a comprehensive set of Terms and Conditions is underestimated by many businesses.
You need to be able to convince your manager that your Terms and Conditions set the tone for your entire trading relationship with your Customer and can get you out of a lot of tricky legal situations if they are drafted properly.
Straight Rope Solution 2:
- Knowledge is power. The best way to get approval for a Terms and Conditions review is to educate your team, your managers and any key stakeholders about the importance of Terms and Conditions and where your Terms and Conditions are deficient. If you can clearly explain where the gaps lie in your documentation, the associated risks with those gaps and how they can be fixed, you’re more likely to get approval;
- Consider engaging someone to provide training to your team to give them a better base knowledge of the standard features your Terms and Conditions should include (click here to read more about the missing clauses we see on a regular basis).
Knot 3 – Time and Cost
You’ve finally got the green light to revamp your Terms and Conditions. But you’re busy, end of month is coming up and you’re also eyeing off those sale fights to Fiji. You’re not sure how you’re going to fit this project in with everything else you’ve got going on.
Straight Rope Solution 3:
- Don’t try to re-write your Terms and Conditions yourself. We often see documentation that has a patchwork of random clauses taken from lots of different sources. The clauses don’t flow property and don’t provide the proper legal protection you thought they would when you took them from your competitor’s Terms and Conditions (no judgment – it happens more often than you’d think!);
- Outsource the review and revision of your Terms and Conditions to experts and be clear on timeframes and deadlines from the outset;
- Consider fixed fee pricing for your Terms and Conditions to ensure certainty around cost.
If you’ve experienced any of the above knotty issues, we can help! Email us now for a free LEDcheck Contract Health Check. We will:
- give your document a score out 10;
- give you a list of recommended clauses and
- categorise the risks in your contract as high, medium or low.
This will help you identify the gaps in your current Terms and Conditions and how you can improve them.
Part 2 of our Every Knot Was Once Straight Rope article will address the areas within the content of your Terms and Conditions that can get you tied up in knots (and show you how to straighten the rope).
For more information, contact Ledlin Lawyers