Over the past year, I have helped several manufacturers and/or distributors review and revise their “Terms and Conditions of Sale” (a.k.a, “standard terms”). As many of you know, “T&Cs” are critical to most businesses as they attempt to set the contractual expectations between two parties. Sometimes those parties are end users of the product. Other times they may be business partners such as raw ingredient suppliers, distributors, etc.
Under most circumstances, it is important to review your terms and conditions periodically to ensure that they still reflect the realities of your business. I suggest asking yourself: “Do I know who wrote the terms and conditions and when they were last reviewed?” If the answer is “no,” a review may be necessary particularly if you are constantly faced with receiving competing terms and conditions from your business partners. I commented on the “battle of the forms” in a previous post. These issues tend not to arise unless there is a major business dispute, such as a lost shipment, breach of warranty, etc. Typically, the strength (or lack thereof) of a company’s terms play a key role in the outcome.
In order to assist our clients with these issues, we have developed a “Terms and Conditions of Sale Questionnaire” for manufacturers and distributors that we use when counseling clients. It includes topics such as “Application/Acceptance of Terms and Conditions,” “Price,” “Terms of Payment,” “Shipping,” “Warranty,” “Limitation of Liability,” “Indemnification,” etc. It is a great tool to help clients assess risk and suggest changes if applicable in an efficient manner.
If there are particular topics that you want us to address regarding terms and conditions, please email us at ManufacturingLawBlog@rc.com.