How to Unravel the Knots in Your T&Cs – Part 2
We didn’t want to leave you hanging after our Part 1 of our knotty little article where we addressed the pain points associated with your Terms and Conditions (from your perspective as a Supplier). We showed you how to recognise when your Terms and Conditions or business documentation need to be reviewed, how to get approval for legal spend to redo the documents and how to manage the process in time and on budget.
But once you’ve massaged out all those pain points, you may still encounter some (not so) smooth sailing and rough seas when it comes time to providing your Terms to your Customer. Keep reading to learn how to untie yourself from some common scenarios you might face once your Terms and Conditions are drafted and in use.
Knot 1 – Sorry, I Don’t Agree to That Clause (often code for “I don’t understand that clause”)
How many times have you provided your Terms and Conditions to a Customer requesting that the Customer sign and return them, only to receive them back with big black strike outs through many of the important clauses? Hands up who has had their Customer send back multiple questions about the meaning of certain words and clauses in your Terms and Conditions? Or perhaps your Customer has presented their own set of Terms and Conditions that they want you to sign.
Getting Unknotted – Straight Rope Solution 1:
It’s all about READABILITY. Many Terms and Conditions are still drafted using old school legalese. Cambridge Dictionary defines legalese as “language used by lawyers and in legal documents that is difficult for ordinary people to understand.”
Wait. Read that again.
“Difficult for ordinary people to understand.”
Your Customers are ordinary people too and objections to clauses in Terms and Conditions often come about because the clauses are just too hard to read and don’t make sense. The use of plain English drafting in an appropriate font size with thought put into the structure of your document will reduce the number of crossed out clauses or questions you receive from your Customers.
In summary, “You”, “We” and “Us” are IN
and “henceforth”, “hereinafter” and “notwithstanding” are OUT.
Knot 2 – Who Signed That Document?
You’ve sent your Terms and Conditions to your Customer and started trading, but the Terms and Conditions were never signed. Should you be concerned? What happens if your Customer later denies ever receiving the Terms and Conditions or denies giving the authority to the person who held out that they were authorised to accept them?
Even worse, what if your Terms and Conditions were signed but your Customer claims their signature was forged? (Fun fact, we once sued a debtor who always signed documents with their left hand to make their signature look different from their driver’s licence – then claimed their signature had been forged).
Getting Unknotted – Straight Rope Solution 2:
It’s all about IDENTIFICATION and VERIFICATION at the right time. Don’t tie yourself up in knots over this, just make sure you get signed copies of your Terms and Conditions so that you can prove your Customer acknowledged and agreed to them. Even if you use online Credit Applications or electronic signatures, there is nothing to stop you from asking for proof of ID, copies of licences, passports or photo ID cards from individuals. If it’s good enough for the Yacht Club, it’s good enough for you (and we could be talking “shiploads” of your product about to go out the door).
Before you pipe that Customer onboard, make sure you have a signed copy of all documentation and confirm the true identity of who is signing the ship’s log. What you don’t need (or want) is a mutiny in the ranks.
Knot 3 – Wait, Who Is My Customer Again?
There’s no point having perfect Terms and Conditions if you can’t actually enforce them when you need to. We often see Clients who never obtained full legal details about their Customer when they started trading with them. Sometimes the trading relationship goes back 20 or 30 years and some clients never actually confirmed the exact legal entity they’ve been dealing with over the years. When the time comes to start legal proceedings, it’s difficult to know who to sue and where to find them, especially when dealing with trading trusts.
Getting Unknotted – Straight Rope Solution 3:
If you supply credit, check that you have a comprehensive credit application that asks for the right information about your Customer, for example:-
- Are you dealing with a partnership? An incorporated association? An individual with no registered trading name?
- If your Customer is operating as a trading trust, do you know who the trustee is? Do you have a copy of the Trustee Deed and a list of all adult beneficiaries?
If or when things go wrong, you might need to consider enforcement. Make sure you have asked for information in your Credit Application that will help you when it comes to serving legal proceedings or enforcing a judgment debt. For example:-
- If you’re in New South Wales, you can no longer obtain a Garnishee Order without proof of bank accounts. Your standard credit application might ask for bank details of your Customer, but what about bank details of any individual guarantors?
- Do you have personal email addresses for all directors in case you need an order for substituted service? Do you know the middle names of any directors who own property so that title details can be confirmed? The more information you have about your Customer, the easier it is to enforce your rights.
Don’t get roped in by incomplete or missing Customer information, drop anchor in a safe and knowledgeable harbour where accurate information beats slippery knots every day.
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.
For more information, contact Ledlin Lawyers