As consumers, we all receive notifications from time to time from service providers about changes to their Terms & Conditions. You may have noticed that you get a load through at once, and this is usually due to a change in legislation. But what does this mean for you in a business context, and are you able to change business terms without agreement from all parties?
What are Terms & Conditions?
Terms & Conditions (T&Cs) define circumstances under which an agreement between parties can be varied. These conditions will differ from business to business. The T&Cs may be agreed to in a formal signed contract, or they may be hosted online and accepted by signing up to a Statement of Work or clicking an online box.
Can I unilaterally change my Terms & Conditions?
In some situations, yes.
It is unlikely that formal agreements can be varied by either party unilaterally, unless this has been expressly agreed to in the contract. Most formal contracts will have a contract variation clause which requires the agreement of both parties before a change can be made. Sometimes there will be a clause within the terms allowing changes to be amended unilaterally.
However, if you are operating on standard terms of business, or have accepted the standard terms of your counterpart, it is more likely that changes can be made. This blog covers standard T&Cs, the kind you often find online or referenced in your order forms or Statements of Work, which are agreed without negotiation.
What changes am I allowed to make to the Terms & Conditions?
If you want to change your terms, consider the following:
- Businesses are not offered the same statutory protections as consumers, but where unnegotiated standard terms of business govern a business relationship, the terms and changes must be reasonable.
- Contracts must have an element of certainty, so any change cannot leave your counterpart being expected to perform the contract in a substantially different manner than is reasonably expected.
- Unilateral changes must be honest.
Minor changes to terms, such as updates due to changing legislation, will normally satisfy the considerations outlined above. When the changes relate to major contractual terms (such as pricing, payment and services offered) more careful consideration will need to be given to whether this can be done without agreement.
What’s best practice for making these changes?
There are a number of ways you can protect your business if you are amending your T&Cs. These include simple things such as:
- When changing terms, record version changes at the top of your T&Cs page – this will alert your to the version which now applies (and also, that a change has been made)
- To be as reasonable as possible, apply the new terms to future contracts and not for application retrospectively. (However, if a business has accepted T&Cs which contain a unilateral amendment provision, they are essentially agreeing to be bound by those terms and any future version.)
- Alert your counterparties to the change. This can be as simple as wording such as, ‘We have updated our Terms and Conditions. To confirm that you have read and accepted these new terms, click this box.’ Continuing to use your services may also indicate acceptance.
- If major changes are being made (such as pricing) emailing all current customers to let them know that the T&Cs have been updated, or adding a notice on your website to alert people of these changes, will likely be seen as a clear presentation of the changes.
Last piece of advice…
Moving forward, always read the Terms & Conditions you are agreeing to. If you are signing an Order Form or Statement of Work, these often link to the online terms – it’s always worth spending some time reading these before signing on the dotted line, as you may have an opportunity to negotiate them. Standard terms must be fair, but if things go wrong the Courts aren’t inclined to be sympathetic to a bad bargain.
Conversely, if you would like the ability to change minor clauses of your online terms, make sure this is stated in clear words in your terms. If possible, direct your counterparts to this clause to ensure there can be no mistake they have accepted it.
If you need help drafting or reviewing your Terms & Conditions, please get in touch and we will be happy to help.
Don’t let your contracts get the better of you. Let the Law 365 team help you grow your business with less risk.
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