Workshop 2 – Standard Terms and Conditions of Sale
STANDARD TERMS AND CONDITIONS
It is very common for a set of terms to be put into a standard contract which a business will use for all
transactions.
- COMMERCIAL CERTAINTY
BUYER V SELLER AGENDA
WHAT THE BUYER WANTS?
(a) Will want the goods to be delivered on time, preferably to its own premises; and
(b) Will want the seller to be liable for any defects
WHAT THE SELLER WANTS?
(a) Will want flexibility for late delivery if, for example, it is let down by its own suppliers;
(b) Will want the buyer preferably to collect the goods from its factory; and
(c) Whilst it might be willing to accept some liability for defects, will not want to be liable for every trivial problem.
The use of standard terms ensures that the final contract suits the needs of whichever party has been able to
insist on their use. Standard terms and conditions have the added advantage of ensuring commercial certainty.
STAFF must be trained to ensure that their company’s terms are properly incorporated into the sales
contract and are the ones incorporated into the contract.
Although some transactions may require individually negotiated contracts to be drafted, generally the
parties will want to avoid incurring these costs for each sale.
STANDARD TERMS AND CONDITIONS
Advantages Disadvantages
Contract on terms favourable to client Lack of flexibility
Standardised procedure Effective training and procedures essential
Commercial certainty Incorporation difficulties/”battle of the forms”
Cheaper Need for regular review
Starting point for negotiation Legal constraints, eg UCTA 1977
1
, Workshop 2 – Standard Terms and Conditions of Sale
EXCLUSION CLAUSES – p.91
The solicitor is likely to be approached for advice in two respects:
(a) Drafting an agreement to minimise the client’s liability if things should go wrong;
(b) Advising on the protection given by exclusions in an agreement once problems have arisen.
Reasonableness test
Exclusion clauses in commercial contracts are in many cases subject to the reasonableness test under UCTA 1977,
and many of the factors which are relevant in deciding whether or not a clause passes the reasonableness test are
specific to the circumstances of each contract.
WHAT IS AN ‘EXCLUSION CLAUSE’?
An exclusion clause is a clause which attempts to exclude or limit the availability of the remedies arising as the result
of the happening (or more often non-happening) of a specified event, generally a breach of contract by one of the
parties.
2
STANDARD TERMS AND CONDITIONS
It is very common for a set of terms to be put into a standard contract which a business will use for all
transactions.
- COMMERCIAL CERTAINTY
BUYER V SELLER AGENDA
WHAT THE BUYER WANTS?
(a) Will want the goods to be delivered on time, preferably to its own premises; and
(b) Will want the seller to be liable for any defects
WHAT THE SELLER WANTS?
(a) Will want flexibility for late delivery if, for example, it is let down by its own suppliers;
(b) Will want the buyer preferably to collect the goods from its factory; and
(c) Whilst it might be willing to accept some liability for defects, will not want to be liable for every trivial problem.
The use of standard terms ensures that the final contract suits the needs of whichever party has been able to
insist on their use. Standard terms and conditions have the added advantage of ensuring commercial certainty.
STAFF must be trained to ensure that their company’s terms are properly incorporated into the sales
contract and are the ones incorporated into the contract.
Although some transactions may require individually negotiated contracts to be drafted, generally the
parties will want to avoid incurring these costs for each sale.
STANDARD TERMS AND CONDITIONS
Advantages Disadvantages
Contract on terms favourable to client Lack of flexibility
Standardised procedure Effective training and procedures essential
Commercial certainty Incorporation difficulties/”battle of the forms”
Cheaper Need for regular review
Starting point for negotiation Legal constraints, eg UCTA 1977
1
, Workshop 2 – Standard Terms and Conditions of Sale
EXCLUSION CLAUSES – p.91
The solicitor is likely to be approached for advice in two respects:
(a) Drafting an agreement to minimise the client’s liability if things should go wrong;
(b) Advising on the protection given by exclusions in an agreement once problems have arisen.
Reasonableness test
Exclusion clauses in commercial contracts are in many cases subject to the reasonableness test under UCTA 1977,
and many of the factors which are relevant in deciding whether or not a clause passes the reasonableness test are
specific to the circumstances of each contract.
WHAT IS AN ‘EXCLUSION CLAUSE’?
An exclusion clause is a clause which attempts to exclude or limit the availability of the remedies arising as the result
of the happening (or more often non-happening) of a specified event, generally a breach of contract by one of the
parties.
2
