You know that phrase, tucked away in the footer of your letterhead: "All our deliveries are subject to our general terms and conditions filed with the Chamber of Commerce." Once upon a time, in a gray past, a lawyer drew up a set of general terms and conditions. These are stored somewhere on the server and no one actually knows exactly where.
Know your terms
For an SME entrepreneur, knowing and understanding your own general terms and conditions and how to use them in practice is very important. These terms and conditions play a role in establishing the rights and obligations of both parties in a contract. General terms and conditions are often included on the back of the letterhead, or referenced in the footnote of the letterhead. In daily practice, they don't actually play a major role. And this while often the most important things, such as limitation of liability, payment terms, warranty terms and other delivery conditions are mentioned in them. So it's worthwhile as an SME entrepreneur to delve deeper into this with your sales and purchasing team.
Industry conditions
It is common for companies to use their own general terms and conditions, but in some industries, industry terms and conditions are also widely used. For example, consider the Metaalunie conditions or the Orgalim conditions in the manufacturing industry, or the Fenex, AVC and Physical Distribution conditions in the logistics sector.
Branch terms and conditions have the advantage that they are widely accepted in the Netherlands within their own branch and do not often meet with resistance. Keep in mind that the use of branch terms and conditions in other countries is not always standard practice. So maybe the foreign contracting party refuses your terms and conditions.
Do more than just report that you have them
It is very important to realize that merely stating the terms and conditions is not enough to be legally binding. You must make it clear that you are only doing business under your terms and conditions. You must also indicate a location where the terms and conditions can be found (e.g. the Chamber of Commerce or website), so that your contracting party can easily view the terms and conditions there. Moreover, if you are doing business internationally, you should always send them along the first time you do business with each other to make them part of your contract. Otherwise, you run the risk of a judge disregarding them. The same applies if you are purchasing and want your industry terms and conditions or your general purchasing terms and conditions to apply.
Want to be sure? Then include your terms and conditions with every quotation and order confirmation. Or send your regular customers an email or letter every year, saying that also for next year your terms and conditions apply to the business you do with each other.
Does your contracting party declare its own terms and conditions applicable in its purchase order or acceptance of your offer? Do not leave that unmentioned, because otherwise you run the risk of ambiguity as to whether your terms and conditions, those of the contracting party or no terms and conditions at all apply. This is especially true if you do business with foreign customers and suppliers.
Review of your terms and conditions
Your business is constantly changing. That's why we advise you to take a close look at your terms and conditions every 4 years. Do they still fit your way of doing business? Are they still current, or has legislation changed? Are there provisions that always lead to discussions with your contracting party? Check this once every 4 years.
Training for salespeople and buyers
You can already tell from this article that the proper use of general sales terms and conditions and general purchasing terms and conditions is of great importance. LAW/FIRM regularly provides interactive training to sales teams and buyers on the proper use of general terms and conditions. The in-house training lasts 2 (or 4) hours and is customized. We get briefed in advance so we can take into account your company, products and industry. After the training, your employees will know:
- How they make national and international general sales conditions and general purchasing conditions part of agreements with customers and suppliers;
- How they can enter the discussion if the contracting party also declares its general terms and conditions applicable;
- In what way in the quotation and purchase order the most important issues are secured;
- How to recognize provisions in the contracting party's terms and conditions that are unreasonable or onerous and can suggest alternatives.
The training can be conducted separately or in conjunction with a review of your general terms and conditions, standard quotations, order confirmations, purchase orders and other sales and purchasing documentation.
Want to know more?
Do you need help drafting general terms and conditions, want to revise your current ones, or are you interested in training? That's where LAW/FIRM can help. Feel free tocontactEsther Tromp, (E: esthertromp@law-firm.international, T: +31655741267)