In January 2024 I ran a series of lightbulb posts on LinkedIn all about business terms. The whole series can be found here in this blog. Please reach out if you have any specific questions or need any business terms drafted or reviewed. We offer full drafting or risk review services.
Q. What are business terms and why do you need them? 🤔 A. Business terms are words or short phrases used in the business world that make it simpler for colleagues, clients, suppliers and leaders to communicate. Whilst these can sometimes appear as ‘jargon’, this shared language aims to explain concepts, protocols, goals and practices in a more concise and understood way. 👍 Understanding these terms is important. Knowing the meaning behind the terminology not only helps you to practise business (especially accounting and legal aspects) responsibly and productively, but it also promotes professional trust. 🤝 Not sure you’re down on business terms? Follow my lightbulb LinkedIn post series this month for some valuable insights. 👀 #BusinessTerminology #BusinessTerms #Jargon #Entrepreneur #BusinessProfessional #BusinessLeader #StartUp #Insight |
Q. What’s the difference between B2B and B2C? A. The terms B2B and B2C are acronyms.
B2B stands for ‘Business-to-business’ and refers to businesses that sell to other businesses. 🏢
B2C stands for ‘Business-to-consumer’ and is used for when businesses sell to customers. 🛍️
Of course, some businesses do both. In this case, the terms are even more important because you will generally market and sell your products and/or services differently, depending on whether you are targeting businesses or the public. 🎯
Professional mindset, language, strategy and branding will usually be affected by a B2C or a B2B brief. However, compliance and legal standards can also differ depending on whether you’re dealing with business or consumer markets.
#B2B #B2C #StartUpBusiness #BusinessTerminology #BusinessTips #CEOKnowledge #BusinessStrategy #B2BMarketing #B2CMarketing |
Q. Why Is It Important To Properly Describe My Business Services? 🖋 A. Whether you’re selling services to the public or to other businesses, you need to ensure your descriptions properly reflect the services you provide. Whilst you will want to showcase your business in the best light and promote the benefits of your services, you need to be upfront and transparent. You also need to set realistic expectations so customers know what they will gain from your services, and what they may not.Failing to accurately describe your services makes you vulnerable to complaints and can mean clients have the right to a refund if your services don’t live up to how they have been described. 💻
This applies to online descriptions on your website, social media and other platforms, as well as your service agreements and other contracts. 📝 Do your proposal documents and service contracts properly describe your business services? If you’re in any doubt please reach out and I’ll help you protect your business by ensuring your service descriptions are accurate.#BusinessServices #ServiceDescriptions #ServiceContracts #CoachingServices #TherapyServices #LegalCompliance #ServiceProvider |
Q. Do I need an IP clause? 🤔 A. For most businesses, intellectual property is very important. Sometimes, your IP relates to the services you’re selling. For instance, designers, photographers, course providers, etc rely on creating and providing materials to make their income. For this, they need to be protecting the intellectual property of these. Businesses whose services or products are not generally considered intellectual property should be aware that intellectual property also includes their website, content and marketing materials. 📸🎨📚 Hence, many business contracts, including service agreements and terms and conditions, contain an IP clause. In some cases, you may wish to retain your IP. For instance, if you provide workshops you won’t necessarily want to sign over the rights for clients to use your course materials in the future. However, if you are, for instance, a designer who has created a logo for a client’s business, then it’s common practice to license (give permission to use) or even assign (full ownership) the copyright on this. A clear and fair intellectual property clause in your business contract(s) will stipulate the right to use your intellectual property and how, or it may serve to let the client know that your intellectual property must not be infringed upon at all. 📜 For many service providers, this is one of the most important parts of a working agreement because, although copyright is automatically assigned to the creator (in the UK), if you are providing services or materials that are under your copyright then ownership can become more complex.Do you have questions about your IP? Don’t hesitate to reach out for legal advice regarding your intellectual property. ⚖️#IntellectualProperty #IPLaw #Copyright #BusinessLaw #ServicesAgreements #TermsAndConditions #Freelancer #BusinessOwner #Photographer #Coach #Designer |
Q. What is an auto-renew agreement and is this ethical (and legal)? 🔄 A. An auto-renew contract is a contract that clearly states the agreement will be renewed automatically at a set date unless cancelled by the service provider or the client/customer.
Some service providers may provide rolling monthly services that auto-renew with a specified cancellation process should the renewal not be wanted and/or needed. Many service agreements, such as those with web hosts or for phone contracts, auto renewal every year or every few years depending on the original contract length. This is entirely legal. In fact it’s super common in B2B agreements (sometimes coupled with an initial period in which the client is tied in with no ability to terminate).
However, the situation is slightly different for contracts with consumers, in that businesses are expected to follow certain guidelines. The first is that the auto-renewal should only be applied if beneficial to the customer. For instance, if the service provided is deemed only of short-term benefit then auto-renewal of such services should not be applied. Secondly, sufficient notice must be given with an option for the customer to dispense with the service before auto-renewal is actioned. Notice of auto-renewal must be given within sufficient time and details (including links) of how to cancel services should be provided. Cancellation should also be made accessible and simple to enact. 🔀 Failing to do so may leave service suppliers at risk of complaints that could pose legal consequences and/or damage to the business's reputation. 🚫It’s important to state that auto-renewal is specific to service contracts and does not apply to many other contracts, specifically not employment contracts where proper written consent to renew is a legal requirement. 📝#Contracts #BusinessContracts #AutoRenew #AutoRenewal #ServiceContracts #BusinessLaw #ServiceSuppliers #UKBusinessLaw |
Q. What should go in my fee clause? 💷 ✍️ A. Whether part of a service agreement, your terms of business, or your terms and conditions, your fee clause is probably going to be one of the most important parts of your contract. After all, it’s all about how you get compensated for your work. It’s essential that this section is clear and direct and that you obtain written agreement before services are provided.Your fee clause may include the following: · Fees/fee structure 💰 · Payment schedule (upfront, instalments, etc) 🗓️ · Payment terms (e.g. [x] days after invoice date)🫰 · Reporting requirements (only sometimes needed - depending on the arrangement)💁 · Late payment penalties ⏰ · Accepted payment methods (including currency if applicable) 💳 · Tax inclusion/exclusion statement 🚫 · Information on any other fees that may be applied - cancellation/termination, commission, expenses, etc 📑
For essential business contracts, such as terms and conditions and service agreements, it’s often wise to refer to a commercial lawyer who can draft these contracts to ensure they are legally robust and properly protect your company. 📄💼#TermsOfBusiness #FreelancerFees #FeeClause #TermsAndConditions #ServiceAgreement #UKBusinessLaw #FreelancerAdvice #Invoicing #ServiceProvider |
Q. How do warranties work? 🛒 🛡 A. Warranties are the promises you (the seller/service provider) and a buyer/service recipient make to one other. They form part of the agreement terms and provide the customer/buyer assurance that the service/item(s) purchased will meet quality standards.
This may refer to the condition/quality of the product/service upon receipt but some warranties, such as those for the sale of larger household electric items, cover the purchase for longer periods. 📺 💻Including warranties in your contract terms is good practice and allows you to set expectations for the quality of the product/service you are selling. However, consumer law may still protect customer’s rights to returns and refunds if a product/service is faulty or does not reflect the sales description, even without a warranty. 🛍️A warranty can make consumers feel more secure and establish trust between buyer and seller. In B2B contracts they are essential to provide comfort to the other party about the organisation they are contracting with - so everyone knows and understands what each party is promising to do for the other. 🤝#Warranty #ConsumerRights #B2Bcontracts #UKLaw #BusinessLaw |
Q. Termination – your ‘get-out’ clause in your business terms 🚪💼 A. You should have a termination clause in your business terms contract. If the relationship is strained, there is a dispute or you are no longer able to provide the service as per the business terms, then you need a way to exit the contract. 👉📜Unless you want to be tied in (or want to tie in the party you are contracting with), then your termination clause should have a ‘termination for convenience clause’. This will give the parties the right to exit when giving the appropriate amount of notice (which can be any period of time).
However, a more immediate termination may be made in specific circumstances (mentioned in the clause) usually including insolvency, failure to pay for goods/services, material breach of contract or changes in circumstance that prevent parties from fulfilling the agreement (such as changes in the law or the loss of a person/entity crucial to providing the service). 🚫Your termination clause is different from a cancellation clause, which tends to outline the process for the client to cancel the service.#TerminationClause #Contracts #BusinessLaw #ServiceAgreement #BusinessTerms #BusinessAdvice #ServiceProvider #Procurement #CancellationClause |
Q. What should go in my data protection clause? 🔐 A. Business terms should include a data protection clause since data protection is something all businesses need to comply with, whether they are collecting only very basic information or processing more detailed or sensitive personal information.Your business terms must, as a minimum, include a data a protection clause stating the following:
Then you can also include the following, although sometimes organisations have separate data processing or data sharing agreements for these details:
Mostly, your data protection clause acts as a commitment to protect the signatory’s data and follow General Data Protection Regulations (GDPR). 🌐
For more detail, please refer to my blog on Data Protection Must-Knows - https://www.auberginelegal.co.uk/post/data-privacy-and-data-protection-must-knows #GDPR #DataProtection #BusinessTerms #UKContracts #B2BLaw #LegalCompliance #ContractClauses #UKBusiness #ServiceProviders #DataController |
Q. Let me tell you about the important liability clause! 📜 A. Liability clauses are crucial in contracts and are commonly included in business terms. 🤝 A liability clause defines the extent to which a party is responsible for losses, damages or legal costs. It should outline and set the limits of liability and specify conditions under which one party may be accountable to the other. 🚧 Typically this is limited to a party’s insurance coverage or the amount of fees paid under a contract in the last 12 month period…but it can be any amount. It’s normally the most negotiated clause of a contract.Examples may include liability regarding breach of contract or it may set out which party would be considered responsible if the service provided causes damage to the company’s property or reputation. For instance, if a social media management company causes offence in a post they have created, will the service provider be held responsible for legal costs or damage to the brand, or will this remain the responsibility of the client? 🤔 There are certain areas of liability that cannot be excluded in a contract (like liability for death or personal injury), then there are direct and indirect losses to consider. Sometimes you might be asked to give a full indemnity (in other words be exposed to unlimited liability) - this is normally for things like data protection breaches or third party intellectual property infringements. It’s a slight minefield, but easy to navigate once you understand the concepts and have worked out what your insurance coverage will protect you for.
Liability clauses should be drafted carefully to ensure they are fair and can stand up to scrutiny. ⚖️Businesses presented with business terms should also pay special attention to the liability clause and must be satisfied that nothing within this could unfairly put their business in jeopardy, before signing the contract. 👀📝#BusinessTerms #Liability #LiabilityClause #LegalLiability #LegalAdvice #UKBusinessContracts |
Q. How Do You Avoid Disputes Over Governing Law & Venue? 🌐 A. Governing law and venue refers to the body of law a court must use when interpreting the contract. It is different to a jurisdiction clause which specifies which nation’s court legal disputes should be handled by. In both cases, parties will generally be free to choose. However, they must agree. 🤝A governing law and venue clause in business terms should set out in which nation’s laws will govern the contract. This is especially important if the parties have their businesses based in different counties and/or states, or have clients that are overseas. 🌍🏛️Decisions on how and where disputes should be dealt with, should they arrive (hopefully not!), are best made in the business terms contract. Having to negotiate governing law and venue, when this has not been pre agreed, can make legal disputes far harder to solve and can delay resolutions. ⚖️#GoverningLaw&Venue #ContractDisputes #BusinessContracts #ServiceAgreements #ServiceProvider #GlobalBusiness |
Q. What on earth are all these ‘boilerplate’ clauses for? 💁♀️ A. Boilerplate clauses are standardised clauses - typical provisions you would expect to see in a contract. They are often either at the beginning or the end of a contract. ✍️These clauses serve to establish a framework for the agreement, addressing many common legal and practical issues. They make the drafting of contracts more streamlined and aid clarity in legal documents. Examples include how to send legal notices to each other, how the parties can vary any terms in the contract,and the governing law/jurisdiction clause. Boilerplate clauses may be standard but this doesn’t mean they aren’t tailored. These common clauses are meant to be adapted and worded to meet the needs of both parties. ⚖️Don’t forget, if you need assistance with your contract agreements - drafting and/or reviewing - then please get in touch. 📞#Boilerplate #Boilerplateclauses #ServiceAgreement #TermsOfBusiness #CommercialLaw #CommericalLawyer #DraftingContracts #ContractTemplates |
Q. How can business terms be agreed upon and signed? 🤝✍️ A. Agreeing on terms of business may be simple and quick. Sometimes though, negotiation and re-drafting of terms may be required. How much you are willing to compromise on terms is completely up to you though you might seek legal counsel throughout this process to ensure you’re not entering into an unbalanced agreement. 🧑⚖️Once business terms are agreed, they need to be signed by both parties.📝All too often, especially in smaller businesses and for short, seemingly straightforward projects, this final stage is skipped over. Often because you and/or the client/service provider are keen to begin work. However, if any dispute or even small issue were to arise and there’s no signed agreement to refer back to, parties will either have to negotiate towards a resolution or follow a legal path if they fail to reach one themselves.Business terms can be hand-signed or signed electronically by both parties and must also be dated. 📅Contracts sent digitally may be signed digitally and there is usually a supported ‘paper trail’ for this. In the UK, digital contracts are a perfectly acceptable and legally compliant way of agreeing business terms. 🖊️💻Signed copies of contracts should also be given to and retained by both parties. 💼#BusinessTerms #ContractLaw #Partnerships #BusinessRelationships #UKLaw #UKBusinessLaw #TermsOfBusiness #NewClient #NewSupplier |
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