Dos & don’ts for template agreements

Dos & don’ts for template agreements

What are they?

Template agreements are legal terms that can be used time and again in different scenarios – examples include the terms of business you give customers, website ‘terms of use’ and privacy statements. They need not be lengthy, formalised documents.

Do you really need them?

One key reason is for your own protection against (among other things):

o   failure to pay

o   unlimited liability – you know the quality of your products/services but you never can rule out bad luck or someone on a mission to sue – limiting liability reduces your exposure if something goes wrong

o   disputes generally – by setting out the ‘rules of the game’ and where your responsibility ends

o   business-specific considerations including intellectual property protection, insurance and product safety, depending on your products/services

o   legal technicalities

Some terms are required and dictated by law based on how your business operates – such as if you offer a manufacturers’ warranty, offer prizes or collect personal information.

Template agreements need not be lengthy, formalised documents.

Key pointers for your template agreements

ð       Legal terms should be ‘reader friendly’ and not too one-sided – particularly relevant if you use standard-form contracts and sell products/services of a kind ordinarily acquired for personal, domestic or household use.

ð       Your customers MUST know about them.

o   customers do not have to read them (and often don’t!) but they must be aware that they exist and where they are available

o   this should happen at or before the point of sale – it’s too late if you are sending terms on the back of an invoice once the work has been done

ð       Get the right people involved – who are you and who are you dealing with? Your legal agreement must be between who or what you are in carrying on your business – it’s no good having a company if you then contract as yourself.

ð       Include the essentials – such as clear terms of payment, clear outlines as to what exactly you provide and what you don’t and last, but not least, a good strong ‘limitation of liability’.

ð       Avoid an internet hotch-potch – as a lawyer, I can only advise that sourcing materials from the internet to concoct your own template is to be tackled with extreme caution! It’s possible to end up with terms that leave your business in no better position (or potentially worse) than it would be if operating without a template.

ð       Avoid bloopers – a few examples that do not work:

o   ‘All care and no responsibility’

o   ‘No refunds or exchanges’ if goods/services are faulty

o   leaving key terms ‘to be agreed’

Having good templates at the outset can save you a lot of time and money later on.

 

Talie Ryan, Director, Virtual Law Office