The title of this article says it all. The importance of thoroughly reading terms and conditions before signing a document is imperative. While it is something that seems simple enough to do, I see time and time again the problems and disasters that arise from a 'quick skim' of the Terms and Conditions. Many of us aren’t inclined to read the terms and conditions - particularly when something we want is dangled in front of our nose.
When you are so close to achieving a business goal it is easy to hurry the process and sign without caution. I can almost guarantee that a number of you have proceeded without caution in some these situations.
Perhaps you simply hit the agree button on a website, or you signed your name to a dozen pages of terms and conditions without actually reading the first paragraph because all you wanted was the promise of whatever it was you were being offered.
But when you fail to read the terms and conditions, or what we might call the 'fine print' in any contract, you are setting yourself up for a fall.
You don't know what you have committed yourself to in the agreement that you just signed. Are you able to answer these questions:
- What have I committed myself to?
- What are my obligations? and,
- What penalties apply if I fail to meet those obligations?
By way of example, are you committing yourself to become personally liable for a company's debt? Are you acting as a personal guarantee in the financial mismanagement of others? Are you exposing yourself and your assets and potential loss of income or property? Are you entering into business contracts where you can pay suppliers according to the time frame stay set? If not, what are the penalties going to be?
The terms and conditions of any contract stipulate those things that will govern a business relationship create legally binding obligations between entities.
Kym Butler of Butlers Business and Law writes in his book, Profit Boosters for Business: 'If you are locking your contracts away then you are failing to properly monitor agreements that may have serious financial penalties attached if legal obligations are not met.'
Terms and conditions provided the foundation for any contractual arrangement, freely entered into by two or more parties. Failure to meet those terms and conditions expose you to legally enforceable liabilities against your own personal assets.
Let's be honest; most people do not read the terms and conditions to which they contractually agree to abide. And, if you are not aware of the terms and conditions, you are not in a position to ensure that they are written to your advantage.
If you want to give yourself the best chance to succeed in any contractual arrangement you need to not only read the terms and conditions but ensure that they are written in your favour wherever possible. You want to be able to trade to your own advantage.Terms and conditions are the foundations that determine the obligations, liabilities and potential benefits of any trade.
If you are ever unsure or in doubt regarding the terms and conditions of a contractual arrangement or trade, it would be best to consult a lawyer who specialises in the area in which you are working.
This is especially true concerning consumer guarantees, rights and obligations.
If you're planning to prepare terms and conditions for yourself or others, you would need to include the following:
- Personal Guarantees
- A charging clause that will give preserve the right to invoke a caveat on your personal property
- A retention of title clause which would ensure that you can retrieve your stock or merchandise if you are not paid.
Whatever your circumstance in business, always make it a priority to read the terms and conditions that you are being asked to sign. And, always ensure that the terms and conditions you have in place for yourself are signed before you begin any contractual arrangement or new business deal.