The Secret Super Powers of T&Cs
If part of your business offering is to make something complicated simpler or you have a super slick brand, or simply that your USP is amazing customer service, then might you be undermining your brand by sending out T&Cs which are so full of legal mumbo jumbo that no one can understand them?
Do they really need all the “hereinafters”, “notwithstandings” and “wherefore art thou Romeos”??
Have a look at them and answer honestly if you understand them.. there’s a lot of T&Cs out there that would baffle even the most accomplished lawyer. They can (and generally should) be in plain English.
Better to use them to your advantage and create something you’re proud to send out to your clients or customers – something that sets the tone of what dealing with you will be like, creating a positive first impression, incorporating and extending your branding, simple steps that make a big difference.
Liability – to cap or not to cap
Lawyers often approach liability as something to be avoided at all costs. Exclude and cap it all!!
In this age of improving transparency, some business are choosing to turn the standard approach on its head and are being upfront and open with their clients by expressly stating what they ARE liable for.
Regardless of the approach, check if your liability cap is set at the right level. Does it dovetail with the liability cap your own supplier provides you with? If you are taking on all your client’s risk, should you be pricing your product or service higher? What is reasonably expected in your industry? Being substantially more generous in taking on liability may seem like a way to stand out, but can you afford to do this? What could it cost you if something goes wrong?
And a final thought on liability is to transfer it! The insurance market is much better now at creating new options for all kinds of liabilities. We can introduce you to some great brokers to explore this option.
Make them relevant
If you sell bespoke jewellery or high end shoes, you don’t want your T&Cs to talk about you selling computer software or magazines (this is a true example I came across recently!).
And if you’ve found a template to use, which is quite common, please, please make sure you remove “the blanks” – there is nothing more obvious that it’s a cut and paste job then seeing this: “Communications should be sent to [FILL IN ADDRESS]”.
You should also make sure that any liability you exclude is relevant – does a handbag or jewellery maker really need to exclude liability for lost data or business interruption? That seems more relevant to a data centre operator for example.
This suggests the business can’t be bothered reading its own docs.. So why should the customer..?
It doesn’t send out a good message that you’re scrimping on your contracts – what else might you be cutting corners on??
And whilst we’re talking about shoes… 👇🏼👇🏼👇🏼 still my dream shoes!! Sophia Webster
Add tangible value to your business
T&Cs have another (super)power which is often overlooked – and that is increasing the value of your business.
If you are looking to take investment or sell your business, the investor/purchaser will go through a due diligence process and having robust contracts in place, securing your sales pipeline and your supply chain will add £££ to the valuation.
The more risks there are from a purchaser’s perspective, the lower the value will be.
So where contracts already exist it’s important to make sure they are up-to-date and enforceable, as they will need to withstand the scrutiny of commercial and legal due diligence and signing up new recurring revenue streams to your T&Cs will reassure a buyer that they will inherit a consistent cash flow.
You can then sit back safe in the knowledge your business will fly through its due diligence raising the most money it can!
Don’t forget the all important implementation stage
So now you have T&Cs you’re proud of. Brilliant. ✅ Now you need to make sure they are used properly in the business – how are customers made aware of them? Think about how the T&Cs become part of the contract you make with your customers or clients.
And just like you review other processes in the business, your T&Cs should undergo regular reviews too – there’s the obvious reason of changes in the law (IR35, GDPR…) but your sales process may be improved, you may change your logistics provider or you may be thinking about cashflow finance – all of which would mean your T&Cs could do with being updated.
Hopefully this week’s posts have been helpful and if you think your T&Cs could do with some TLC, then give an Alpaca a shout.