The meaning of the general conditions of sale
When creating a new business, writing detailed terms and conditions may not be a top priority. However, putting this task up the list saves you time and money, writes Claire McDermott of Flynn O’Driscoll.
The preparation of the general conditions is very important and can only be done by your lawyers. It requires a significant contribution from companies, since important parts of the standard conditions are determined by the economic circumstances of their business, in particular the sales process of the company, the terms of payment and the consequences for the delivery of the goods. ,
We have discussed some of the key considerations and general conditions below to keep SMEs away from some of the common potholes.
This may seem fundamental, but you must know who you are contracting with. In the case of a company, make sure you have provided the correct name, address, and registration number. A simple search on the Business Registration Office website is free.
Know how long you will be required to provide goods or services under the contract and how and how long the term will be extended.
Price: It should be clearly stated if the following items are included in the price or are extra:
Delivery and unloading costs
VAT is another consideration for pricing and payment. It is common for prices to be quoted net of VAT. If this is the case, this must be stated.
Payment term: It is extremely important that your terms and conditions clearly define when, for example, goods should be paid. at the time of ordering, upon delivery or within 30 days of receipt. It is important that there is no ambiguity. Once customers are fully aware of their payment obligations, there is no room for discussion and the company’s cash flow should not be affected.
Reward for early payment: If customers are offered credit lines, that is, if the customer is not required to pay for the goods or services immediately, this may, in the best interest of the company, encourage customers to pay earlier than necessary. For example, a 5% discount on payments made within 10 days instead of 30 days adds to the company’s cash flow. If, on the other hand, you want to collect interest on overdue payments, you must clearly indicate this in your terms.
Make sure that your liability is limited or excluded as much as possible. The 1980 Law on the Selling of Goods and Services and the 1995 Regulation of the European Communities (unfair terms in consumer contracts) should be taken into account.
Retention of title
Make sure that you have a clear clause to maintain ownership of your goods until all sums due are paid in full. If a recipient or a bankruptcy trustee is appointed for your client, you will need a fully effective retention of title clause to retrieve your property. If not, you can simply become an unsecured creditor. Be careful in prime contractor / subcontractor situations as these contracts often provide for the lifting of the retention of title and if the prime contractor becomes insolvent – even if the principal could be a government agency – you will find out that perhaps you represent only one guarantor. Creditor.
Applicable Law and Jurisdiction
If you enter into a contract with a non-resident legal entity or person, the latter may request that you change the applicable law or jurisdiction to which the contract is governed. Irish companies have an interest in making their contacts subject to Irish law and subject to the jurisdiction of the Irish courts. It can be very costly and time consuming to have litigation outside the state. Legal proceedings may take several years in some European countries.
Mediation v Arbitration
When disputes arise – and this will inevitably be the case – it may be quicker to bring these disputes to an alternative dispute settlement forum such as mediation, rather than go to court. In our experience, alternative dispute resolution can be faster and cheaper than going to court. Arbitration may be suitable for construction contracts, but it is not suitable for many other areas of activity.
Make sure your terms are binding
Standard terms are only effective if properly incorporated in the contract. The easiest way to do this is to explicitly state in the pre-contractual communications that your company’s terms and conditions apply to all subsequent contracts. This may result in the other party negotiating the terms. However, you must be aware of the risk that the terms negotiated will be binding and that you will not involuntarily conclude a contract under conditions set by the other parties. We recommend that you set the terms and conditions on the company’s website in the form of offers, orders, order confirmations, delivery notes and invoices.
In practice, all sales or purchasing staff should be aware that it is important to put the company’s terms and conditions in the foreground of a sales negotiation.
In case of uncertainty regarding the standard terms and conditions of the party governing a particular transaction, the courts will determine which party appears to agree to the other party’s terms. As a rule, the last message exchanged by the parties, which was not expressly rejected by the recipient, is considered an offer called the “last move”.