Drafting General Terms and Conditions: A Checklist for Business Owners

General terms and conditions are the small print that can have big consequences. Well-drafted terms protect your business against risks and create clarity for your customers. But what should you pay attention to? In this article, we provide a complete checklist.

Why have general terms and conditions?

General terms and conditions serve several functions:

• Limitation of liability: You can limit or exclude your liability for certain damages
• Clear agreements: Terms and conditions create clarity about delivery times, payments and guarantees
• Uniformity: You don't have to renegotiate the same points for every agreement
• Dispute resolution: You determine which law applies and how disputes will be resolved
• Professionalism: Good terms and conditions convey professionalism

When do general terms and conditions apply?

General terms and conditions do not apply automatically. Two requirements must be met:

1. Reference to the terms and conditions

You must refer to the general terms and conditions when concluding the agreement. You can do this, for example, by stating on your quote or website: 'Our general terms and conditions apply to all our agreements.'

2. Making them available

The other party must have had the opportunity to take note of the terms and conditions before or at the time of concluding the agreement. This can be done by:

• Sending the terms and conditions physically
• For a webshop: accessible via a link before the order is placed
• Making them available for inspection at the office (only if providing a copy is not possible)
• Filing them with the Chamber of Commerce (KvK) or the district court (as an alternative)

With electronic contracts, it is sufficient if the terms and conditions can be saved and remain accessible for later reference.

The checklist: what should be included?

Below are the most important components of good general terms and conditions:

1. Definitions

Start with definitions of key terms: who is the 'contractor', what is the 'assignment', what is covered by 'services'? This prevents disputes later on.

2. Applicability

Determine when the terms and conditions apply and exclude any terms and conditions of the other party (the 'battle of forms').

3. Offers and agreements

Stipulate how long quotes are valid, when an agreement is formed, and whether you can change prices.

4. Performance of the agreement

Describe how you will perform the agreement, which deadlines apply, and what cooperation you expect from the client. Also state that deadlines are indicative (best-efforts obligation vs. obligation to achieve a specific result).

5. Payment terms

An essential component. Include:

• Payment period (e.g., 14 or 30 days)
• Consequences of late payment (interest, collection costs)
• Any advance payment or deposit
• Right of suspension in case of non-payment

6. Limitation of liability

This is one of the most important clauses. You can:

• Limit liability to direct damages
• Set a maximum for compensation
• Exclude certain types of damage (consequential loss, loss of profit)

Please note: excessive limitations can be considered unreasonably onerous, especially towards consumers.

7. Force majeure

Define what constitutes force majeure and its consequences. In the event of force majeure, you can suspend your obligations or terminate the agreement without being liable for damages.

8. Intellectual property

Who holds the rights to the work delivered? By default, intellectual property rights remain with the creator. If you want the rights to be transferred to the client, this must be explicitly arranged. Read more about protecting intellectual property.

9. Confidentiality

A confidentiality clause obliges parties not to share confidential information with third parties.

10. Complaints and warranty

Stipulate the period within which complaints must be reported and the consequences. In B2B, you can limit the complaint period; for consumers, statutory warranty periods apply.

11. Applicable law and disputes

Determine which law is applicable (Dutch law) and where disputes will be settled. You can opt for the ordinary courts, but also for arbitration.

B2B vs. B2C: important differences

Consumers receive extra protection under the law. Provisions that are perfectly acceptable in B2B relationships may be considered unreasonably onerous in B2C relationships and therefore not apply. The 'black list' (always unreasonable) and 'grey list' (presumed unreasonable) in the Dutch Civil Code are guiding in this respect.

Examples of provisions that are problematic with consumers:

• Complete exclusion of liability
• Complaint periods that are too short
• Tacit renewal of subscriptions without a cancellation option
• Choice of forum outside the consumer's place of residence

Common mistakes

In our contract law practice, we regularly see these mistakes:

1. Copying from the internet

Copying general terms and conditions from another website is risky. The terms may not be suitable for your business or may be outdated. Moreover, you could be committing copyright infringement.

2. Failure to make them available

If you have not made the terms and conditions available in time, they can be nullified. Many business owners forget this.

3. Never updating

Terms and conditions from 2010 do not account for the GDPR, new consumer rights, or changes in business activities. Update your terms regularly.

4. Being too aggressive

Terms that place all the risk on the customer are counterproductive. They can be nullified for being unreasonably onerous, and they will deter customers.

5. Ignoring the battle of forms

If both parties have their own terms and conditions, a 'battle of forms' arises. The law then determines which terms apply. Be prepared for this.

Costs of general terms and conditions

The costs of drafting general terms and conditions vary with the scope of the work. We agree on a fixed fee in advance:

• Simple B2B terms: the least amount of work
• Extensive B2B terms: more customisation, therefore more hours
• B2C terms (webshop): extra attention to consumer law
• Combination of B2B and B2C: two sets that are aligned with each other

This investment often pays for itself quickly with the first dispute you prevent or win with them.

Tips for implementation

1. Refer consistently - Put the reference on all your documents: quotes, order confirmations, invoices, website
2. Make them accessible - Publish the terms and conditions prominently on your website
3. Ask for confirmation - Have customers in a webshop actively agree (checkbox)
4. Train your staff - Ensure everyone knows how the terms and conditions should be handled
5. Keep proof - Keep proof that you have provided the terms and conditions

Conclusion

Good general terms and conditions are indispensable for every business owner. They protect you against risks and create clarity for customers. Invest in customised terms and ensure you use them correctly.

Would you like to have general terms and conditions drafted or your current ones reviewed? Contact us for a meeting without obligation.