Writing fair contract terms: seven top tips
Contracts between businesses and consumers are only legally binding when the terms are fair. Unfair terms are those that give the business an unfair advantage or try to limit the consumer's legal rights.
Having clear and fair terms in your contract will save you time, help prevent disputes and reputational damage and protect your business if things go wrong. Follow these top tips to ensure your contracts are fair:
1. Respect your customer's interests, don't use terms that you wouldn't like to sign up to yourself.
2. Avoid ambiguity - ensure that your terms are not open to a number of different interpretations.
3. Be open and fair - don't hide important wording or use 'small print' that might surprise or mislead your customer. Wording that has a significant impact for customers should be particularly drawn to their attention.
4. Use ordinary words and avoid legal jargon or technical language. Put yourself in your customer's shoes to make sure the effect of the term is likely to be understood by them.
5. Ensure that your written contract is reader-friendly. Make the terms legible. Use short sentences and subheadings.
6. Consider whether terms describing the contract's main subject matter and those setting the price (ie the essential obligations of the contract) are specifically brought to the customer's attention and are easy to understand.
7. Take particular care with terms that could potentially work against your customer. For example, terms that limit your liability when thing go wrong, terms that allow you to keep a deposit or terms that impose financial sanctions (eg cancellation fees).