(Last Updated On: August 17, 2007)

If you are in a line of business where you repeatedly have to enter into agreements with your customers and the basic terms of those agreements rarely change, you may want to consider the adoption of "General Terms and Conditions."

Rather than having every contract spell out all terms and conditions, your individual contracts with customers could be rather short and refer to your General Terms and Conditions.

The General Terms and Conditions could contain all the terms of the business relationship that rarely change, such as:

The representations you do or do not give about the quality of your products or services,

the general nature of your goods and services,

when you expect payment for your products or services,

when you or your contract partner are allowed to terminate the contract and the consequences of such termination,

any elements of the price of your goods and services that never change and

all those boilerplate legal provisions you don’t understand but your lawyer tells you to put in there anyway.

By using General Terms and Conditions, you standardize a large part of every customer relationship.  The
individual contracts with customers would become much shorter and
easier to draft and execute.  You just have to make sure that every
individual contract or oder specifically incorporates your General
Terms and Conditions.  For example with language like this:

"The General Terms and Conditions dated _____ are incorporated into this work order by reference and are a part of this work order as if fully stated herein."   

In addition, you may want each individual customer acknowledge receipt of your General Terms and Conditions, so that there is never any doubt which version governs the business relationship.

You could even consider allowing for changes of your General Terms and Conditions without the agreement of  your customers who are already governed by the General Terms and Conditions.  Be aware, though, that not all changes without proper notice may pass muster with the courts if challenged.  Check out this post by Techlaw on the subject.

The individual contracts could be called anything you want, but terms
like "work order," "service order," "project order," "project specifications" may make
sense.

Beyond being a time saver, there are other potential benefits of General Terms and Conditions:

You can post your General Terms and Conditions  on your website and give your customers immediate
access to what a contractual relationship with you would look like;

You can create the appearance that your General Terms and Conditions
are non negotiable and deter your customers from trying to change the terms of the business deal.  While you and I know that every contract is negotiable, for some reason many people think that General Terms and Conditions are set in stone.

**This post is for informational purposes only and does not constitute legal advice**

About Imke Ratschko


Imke Ratschko is a New York Attorney helping small businesses, business owners and entrepreneurs with all things "Small Business Law," such as litigation, contracts, business owner disputes, shareholder and operating agreements, sale or purchase of a business, investors, and starting a business. You can reach her at 212.253.1027 or by email.

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