Designing a Legally Binding B2B Sales Process (Part I) - Terms & Conditions

Updated on 11/09/2019

In this article, you will learn about:

The importance of having carefully reviewed Terms & Conditions

How to publish your Terms & Conditions

Topics covered: B2BSales ProcessTerms & Conditions

This article covers the first 2 steps of the design of your legally binding sales process, with a focus on Terms & Conditions. In Part II, we will cover the preparation of your Purchase Orders.

Businesses often struggle to get it right when it comes to signing binding contracts with their customers. What should be an easy feat can quickly escalate into a tedious process of circulating multiple draft versions and trying to corner busy executives into obtaining handwritten signatures on lengthy jargon-filled documents. This makes the work of salespeople more arduous and the whole experiment frustrating (to say the least).

Having lawyers come in does not always simplify matters. Lawyers are a risk-averse profession. Spotting legal problems is in their DNA so they will tell you if something is wrong in your process and documents. However, few of them will actually solve the problem for you. Sure enough, they will tell you what the law says, but it will fall on you to design your sales process to make it legal yet workable in practice.

At Companyon, we are on a mission to make legal hassle-free for entrepreneurs, so they can focus on growing their business. Based on our experience in the field, we have come up with a simple plan for companies to design a legally binding sales process. We will discuss those steps in the sections below. Please note that this plan:

  • Is designed for a business-to-business (B2B) context only (we will come up shortly with a plan that can be translated to a B2C context); and
  • Can be applied in the context of the sale of most goods and services (including the likes of on-premise software or Software-as-a-Service (SaaS)).

Step 1/3 | Prepare Terms and Conditions That Protect Your Business And Make It Compliant

The Terms and Conditions (T&Cs) - also known as Terms of Sale (ToS) in the United States - are the legal provisions applicable to the sale of your products or services.

T&Cs serve two purposes:

  1. Protecting your business: in case your relationship with your customer goes sour (typically, if your customer refuses to pay), you must make sure that you are in a position to enforce certain rights (for example, requesting late payment or penalty fees, reclaiming your products, stopping your service, etc.). Also, you must clearly define the limits of your liability to protect your business against nasty claims from disgruntled customers. Finally, you must make sure that your intellectual property and confidential information are adequately protected if disclosed to third-parties (so that strong legal barriers prevent them from running away with your work).
  2. Making your business compliant: whether you agree or not, you must provide your customers with a series of mandatory information prior to let them do business with you. You must among others inform your customers about who you are (name, address, company number, VAT number, etc.) and about the main characteristics of the contract (duration, characteristics of the products, price, etc.). Note that there is less to worry about in a B2B context than in a B2C context (where heavy consumer protection provisions apply).

Draft your T&Cs must in a way that makes your company comply with applicable laws and protect your business from major legal risks.

Step 2/3 | Publish Your Terms & Conditions Online

If you are happy with the content of your T&Cs, the next step is to deploy them. A good practice is to publish your Terms & Conditions online, on a dedicated page of your website. This is so you can:

  • Easily make links to your T&Cs (in your sales documents for example);
  • Easily redirect your customers and partners to the information you must disclose to comply with applicable laws
  • Enhance your credibility (customers like to deal with compliant companies).

There are practically no counterarguments to publishing your T&Cs online. Even in a B2B context, your T&Cs should not contain any confidential information or terms. If you must disclose confidential information to your customers (such as certain functionalities of your SaaS or the pricing of your services), do so in a Purchase Order that you send out privately (see the section below to see how to structure your purchase order).

Many companies view the publication of their T&Cs as the end of the legal road but that is a mistake. Laws change quickly (especially in regulation-heavy sectors) and the nature and scope of business activities even more so. T&Cs should be deployed in a format that can easily reflect those changes when they come along. On top of that, you should keep track of all the versions of your T&Cs (as different versions will apply to different customers or to different business transactions). Finally, if you happen to do business in different European countries, you may need to have your T&Cs translated into local languages and have each of them incorporating country-specific legal requirements.

Managing T&Cs can quickly become a nightmare. Fortunately, you may subscribe to legal-as-as-service solutions (like Companyon’s Legal Portal) that will do the heavy work for you.

Check out Part II of this series of articles, where we cover the preparation of your Purchase Orders.

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