How to Draft Terms and Conditions
Knowing how to draft terms and conditions is an important component in any contract.4 min read
Knowing how to draft terms and conditions is an important component in any contract. The terms and conditions are those statements made in a contract that identify the purpose of the contract, what services are being performed and/or what products are being sold, and the overall duties and responsibilities of both parties involved.
Before Writing the Terms and Conditions
Before you write the terms and conditions, you should first meet with other individuals within your own company before sitting down and discussing important items with the other party. That way, you’ll be able to draft up some key topics for discussion when entering the negotiating phase of the contract. Keep in mind that the other party might have different goals and objectives, so the they might not agree to all of your terms and conditions, particularly if such terms are more favorable to you.
Think about what the other party might come back with; individuals from the other party will likely meet to discuss their own objectives for the contract and what terms and provisions they want to see in the agreement. Therefore, you might be met with some disagreement as to any one or more of the terms and provisions that you want to include.
Writing the Terms & Conditions
The terms and conditions should set out the agreed upon terms between the parties, including the following:
1.What happens in the event of a legal dispute
2.What happens if the services to be done are not completed by the due date identified in the contract
3.What happens if payment is not made according to the terms and provisions of the contract
4.What happens if either party doesn’t abide by their contractual duties in any other way
5.What happens if an unforeseen circumstance arises
Generally, the contract will identify what happens if a legal dispute arises. It might establish the venue for where the case should be heard. This is common for large entities entering into contracts with consumers. There is usually a legal dispute clause indicating that should a consumer wish to bring a legal suit against the company, the parties will first engage in legal dispute resolution, which is a form of alternate dispute resolution, before taking the case to court. This is done in an effort to minimize time spent litigating a case, along with the hefty fees associated with it. Therefore, it would be beneficial for the parties to include such a term or provision identifying how the legal dispute will be heard, and where it will be heard. It should also include who will be responsible for hiring a mediator or arbitrator, depending on whether the parties choose to enter mediation or arbitration as a form of alternate dispute resolution.
If the services aren’t completed by the due date identified in the contract, the parties should indicate what happens next. It should include language stating that the party failing to provide the services by the due date must communicate to the other party why the services are not complete, providing a reasonable explanation for the delay. Thereafter, the parties should rectify the problem by amending the completion date, otherwise, one of the parties might be in breach of the contract.
If payments are not made according to the terms and conditions in the contract, the parties must communicate with one another to rectify the problem. Otherwise, similar to the issue identified above, one of the parties will be in breach of the contract.
If either party fails to abide by their contractual duties and obligations under the contract for any other reason, they will be considered in breach of the contract. This means that the victim party can bring a legal suit against the breaching party for the breach. In order to prevent a breach of contract claim, it is crucial for the parties to communicate with one another on an ongoing basis to ensure consistency and full adherence to the contract.
If, due to unforeseen circumstances, the parties cannot adhere to the contract, this might be a valid defense on the part of the breaching party. For example, assume that Company A hired Company B to paint the exterior of its building. Throughout the time of service, however, there is a hurricane, causing a significant delay on the part of Company B to finish the job on time. Company A will have a very difficult time bringing a breach of contract claim against Company B, specifically due to the unforeseen circumstances.
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