What are standard terms and conditions and why do you need them?

November 27, 2025

From small purchases to large, the success of every business transaction depends on a shared understanding between the parties involved. Standard terms and conditions (T&Cs) put that understanding into writing. They set out essential elements such as how payments should be made, what to do if something goes wrong, and how to handle disputes. Essentially, they are laying down the ground rules, so everyone knows where they stand before the goods or services are delivered.

What are terms and conditions?

T&Cs form the basis of your day to day business agreements. Instead of rewriting each contractual term on a case by case basis, businesses prepare a standard document that governs every deal. They can provide clarity on things such as:

  • Payment terms: when a payment is due, acceptable methods of payment and what happens in the event of a late payment.
  • Delivery expectations: delivery timelines, shipping methods and who is responsible for delays or damage.
  • Liability limits: what each party is responsible for, caps on financial exposure.
  • Termination: conditions under which either party may be able to end the agreement and what happens after that.
  • Intellectual property rights: who owns them and how they can be used.
  • Force majeure: provisions for unexpected events such as natural disasters that may impact performance.

By having T&Cs in place, both parties know exactly what rules apply before entering into any agreement.

Why do you need terms and conditions?

T&Cs are used when a business is seeking legal certainty. This can mean you may find T&Cs:

  • Printed on the back of account opening forms, order forms and order confirmations: this ensures that all customers and prospective customers are provided with the T&Cs to increase the chances of them applying to the arrangement.
  • Linked online during a checkout process: this makes sure customers agree to terms before completing a purchase.
  • Attached to quotes or proposals: this clarifies expectations from each party before the deal is finalised.

Due to the benefits of having standard T&Cs in place, it is not uncommon for both businesses in a transaction to refer to their own T&Cs throughout the process. Proper incorporation of T&Cs into your business processes is vital to ensure that your T&Cs have the best chance of governing the arrangement.

What are the benefits of terms and conditions to a business?

Having a solid set of T&Cs that is properly embedded into your businesses processes not only helps you have more legal protection, but it also helps efficiency within your business. They help avoid misunderstandings by spelling out exactly what each party is responsible for which creates transparency in transactions as it ensures each party is on the same page from the start. Most importantly, they help you manage risk by setting clear boundaries around things like liability and cancellations, enabling you to protect your business from unexpected losses.

What are the risks of not having terms and conditions?

Without T&Cs you can be more vulnerable to disputes, for example over things like ensuring payments are on time and ensuring deliveries happen when agreed. Without having T&Cs each transaction needs either its own full negotiation or may leave the terms to be decided based on the other party’s terms or other factors, such as terms implied by law, which not only takes more time but increases the chances of something being missed out or changed or not what the parties wanted..

Why implement terms and conditions in your business?

Standard T&Cs are an essential tool that will help protect your business and keep it running smoothly. Whether you’re looking to establish best practices or seeking to streamline operations, implementing T&Cs is a smart move.

How we can help

If you’re considering implementing standard terms and conditions for your business or need to ensure your T&Cs are up to date, contact us to discuss how we can help.

Mark Chapman
Partner, Commercial
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This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.

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