Terms and conditions template – a guide for SMEs

Posted on November 15, 2020
Posted by Marion Kennedy

Terms and conditions templateA terms and conditions template tells your customers how you will provide goods or services to them and what their rights and responsibilities are under the sale. Providing your terms and conditions to customers before you finalise the sale minimises the risk of disagreements between you and your customer about how the goods or services will be provided, and helps to protects your business from facing late payments or being sued.

What is a terms and conditions template?

A terms and conditions template is a set of standard terms and conditions you should use when selling goods and services, which set out the key rights and responsibilities of you and your customers. Your terms and conditions of sale are different to the terms and conditions of your website (also called website terms of use). For a guide on website terms and conditions, check out Website terms and conditions template – create yours today.

Templates you can use to generate your terms and conditions of sale are as follows:

  1. if you are selling goods: Terms and conditions – Sale of goods;
  2. if you are a service provider: Terms and conditions – Services; and
  3. if you are selling goods and services: Terms and conditions – Sale of goods and services. 

What does a terms and conditions template include?

Terms and conditions of sale include policies such as:

  1. information about what you are selling, including price, payment and delivery options;
  2. your responsibility to provide the goods or services;
  3. your general returns and refunds policy;
  4. details of the customer’s right to cancel a contract;
  5. your complaints handling policy, if you have one;
  6. limits on your business’ liability; and
  7. intellectual property and confidentiality protections.

You can find more guidance on terms and conditions here.

Is it legally required?

A terms and conditions template is not legally required but it helps make sure expectations on both sides are clear and enables you to protect your business if something goes wrong. Terms and conditions of sale can:

  • help you to explain your pricing, sales and delivery information;
  • protect confidential information;
  • protect your business from liability and late payments; and
  • help your business to run efficiently.

Using a terms and conditions template can help you to understand what rights your customers are legally entitled to when it comes to returns, refunds and complaints and the policies you need to have in place to deal with this.

Providing your terms and conditions template to customers

How do I provide my terms and conditions to customers?

You should make sure your terms and conditions are easily accessible for your customers. You could include them on your website and on documents you provide to a potential customer (eg order forms, quotes or catalogues). There are certain rules for different types of sales, for example:

  1. For telephone sales you will need to provide terms and conditions to your customer after the call, but before the sale is finalised. There is also key information that you have to provide to the customer during the sales call itself and at particular points in the sales process, along with access to a cancellation form.
  2. If you are selling through a catalogue or similar, you will need to produce your terms and conditions within the catalogue. If you have a website as well, you could provide a web address in the catalogue to the location of the terms and conditions on the website, but you must not rely on the fact that recipients of the catalogue will go online to view them. You must also provide a model cancellation form.
  3. If you are selling face-to-face at a customer’s home or business premises, using standard written terms and conditions is straightforward as you can simply provide them on paper for the customer to read through before they agree to the sale.
  4. If you are selling through a website, you should provide a clear link to them on your website and ensure that they are in a format that can be downloaded and printed off by the customer. It is common practice to put a link in the footer on every page of your site. It is good practice to also include a link and a tick-box near the end of your online sales process to make customers acknowledge that they have seen your terms and conditions before they can actually make a purchase.

You can find more guidance on customer rights for different types of sales at Customer service.

How can I help customers better understand my terms and conditions?

To improve your customers’ understanding of terms and conditions of sale, particularly on a website, the UK government recommends that you:

  1. use a FAQ format to present key terms, eg ‘How can I return items?’;
  2. illustrate key terms with icons, eg using a pound sign next to the question ‘How much does it cost me to return an item?’;
  3. provide terms in a scrollable text box rather than requiring customers to click into a different page to view;
  4. provide information in short chunks at the right time, eg using a pop up box when requiring a customer’s email address explaining why you need it;
  5. use illustrations and comics to explain certain processes such as how to cancel the contract;
  6. tell customers how long it will take to read your terms and conditions; and
  7. let customers know when it is their last chance to read your terms and conditions.

Can I change my terms after a sale?

Once you have agreed a sale with a customer, you should not change your terms and conditions of sale without that customer’s consent. Otherwise, you risk your change being unfair and unenforceable. If you use Terms and conditions – Sale of goodsTerms and conditions – Services, or Terms and conditions – Sale of goods and services, these terms specify that you must get your customer’s signed consent in writing to any changes you make.

You should also be aware that it is likely to be unfair to include policies in your terms and conditions template such as:

  1. prices of goods may be raised if stock prices or other costs increase before delivery;
  2. delivery dates and costs may be changed at any time; or
  3. the business can change its terms at any time as it deems necessary.

Using your terms and conditions template to set out customer service policies

Do I have to have a customer complaints policy?

There is no legal requirement for you to have a formal complaints policy.

However, in most cases you must inform consumers of your business and official registered address, e-mail address, telephone and/or fax number so that consumers know where to send complaints or requests for information about your services. You are under an obligation to respond to consumer complaints as quickly as possible and use your best efforts to find a satisfactory solution to each complaint.

What should a customer complaints policy say?

It is recommended that you give consumers details about how a complaint can be made, making it as easy and convenient as possible for the consumer to complain. In addition, you may need to provide details of an out-of-court complaint and redress mechanism to be used in the event that you and the consumer cannot resolve the complaint between you; see Complaints and demands for further information about this.

It is recommended that you set out this information in your terms and conditions (use our template Terms and conditions – Sale of goodsTerms and conditions – Services, or Terms and conditions – Sale of goods and services).

In addition, you should consider having an internal policy which explains to your staff how to deal with complaints. This internal policy should set out who is responsible for dealing with complaints (possibly a two-tier system), how staff should record their interactions with consumers (eg on specific forms), and what they may offer aggrieved consumers in order to resolve the complaint (eg letters of apology, vouchers, discounts, replacement  goods or services and/or free goods or services).

It is a good idea to review your policy on a regular basis to take into account feedback from your consumers and analysis of your complaints data.

Do I have to allow a consumer to return goods they have bought from my shop?

This depends on the goods you sell and how you sell them. You are usually not legally obliged to accept returns for goods bought at a shop unless the goods were not of satisfactory quality, not fit for purpose or not as described.

Many businesses, however, have a policy which allows consumers to return their goods either for a refund, exchange or credit note if they change their mind after purchase, provided they are returned in a condition in which they can be re-sold. If you have a policy like this in place, you must stick to it. You can find more information about returns at Dealing with consumers who want to return goods.

There are separate rules when you are selling digital content. For information on your obligations when selling online, see Customer service when selling online.

What should my returns policy be if someone changes their mind and wants a refund for goods not bought in a shop?

This depends upon whether you are selling goods to a consumer or business customer.

A consumer usually has an automatic right to return the goods for any reason, provided they tell you that they want to do so within 14 days of receiving the goods. The 14 day period starts on the day after the consumer received the goods. Where the goods are ordered at the same time but are delivered piecemeal, the 14 day period starts on the day the final delivery was made. If the order is for something which will be delivered regularly over a period of time (such as a magazine subscription or food box), the 14 day period starts after the first delivery is received. The consumer has this right regardless of whether or not you have a policy which says so. Also, if you have a policy which is more generous than these minimum rights, then you must stick to that (you cannot offer less than this legal minimum, however ) . For example, you may choose to offer more than the legal minimum for consumers, such as a longer period of time in which to effect the return. This is a matter for you to decide based on the type of business you are running .

You must tell the consumer about their right to cancel before they make the purchase and if you did not do so, they have longer to make their return. Your obligations are different if there is something wrong with the goods the consumer bought. You can find more information about returns at Dealing with consumers who want to return goods.

It is recommended that you set out your returns policy in your terms and conditions. If you use our terms and conditions templates, they include the legal minimum returns and cancellation policies.

What should I do if a business customer wants to return goods?

If a business customer simply changes their mind after buying goods from you, you are not legally obliged to accept a return. You will only have to do so if the goods were not of satisfactory quality or were not fit for the purpose for which they are commonly bought, or if they were not as described. However, if you have agreed with the business customer that you would accept returns within a certain time, in your terms and conditions or in your contract, then you must stick to what you have said. See Dealing with business customers who want to return goods for further information about what to do in these situations.

The content in this article is up to date at the date of publishing. The information provided is intended only for information purposes, and is not for the purpose of providing legal advice. Sparqa Legal’s Terms of Use apply.