Drafting Terms and Conditions

Although I have had a couple of interim injunction applications I have spent most of the weeks since our last IP newsletter on non-contentious matters.

I’ve had some really interesting instructions over that time:

  • An overseas start-up company asked me to settle terms and conditions for contributions for a new on-line publishing venture which requited me among other things to look into the tax treatment of copyright royalties to non-domiciled authors;
  • A master chef whom I had previously advised on trade marks and unregistered design rights got me to draft terms and conditions for a newly formed company that will offer cooking demos, publish gorgeous recipes online and off, distribute hard to find ingredients and cooking implements and provide catering for business and social events; and
  • A local start-up contacted me through the Yorkshire and Humber Suppliers’ Register and asked for a quote for a whole slew of legal instruments for a new e-business some of which, such as website access terms, privacy statements and terms of business, were well within my specialization and others of which, such as company formation and shareholders’ agreements, were not.

Barristers and Non-Contentious Work

The fact that I do non-contentious work often comes as a surprise. The popular perception is that barristers are supposed to stand up in court in wigs and gown and cross-examine bent coppers while solicitors do everything else. In actual fact, we barristers get much of our non-contentious work from solicitors, patent and trade mark attorneys and other intermediaries; and it is because we go to court that they send such work to us. They don’t as a rule send us everything. After all they can read the Encyclopaedia of Forms and Precedents and indeed text books and legislation as well as we can. They seek our advice or get us to draft legal instruments where the law is not clear. The reason they send us that sort of work is not that they can rely on our indemnity insurance if we get the law wrong but because we are in the best possible position to get it right. That is partly because we have more time to concentrate on legal research but it is mainly because we get to know the judges and learn how they think. That enables us to anticipate better than most how the judges will apply the law to a new situation.

Ts & Cs and Risk Management

Returning to Ts and Cs, the first thing to note is that they are about managing risk. In doing business a company incurs all sorts of risks. Non-payment by customers or clients, infringement of third party intellectual property rights, injury, loss or damage caused by alleged defects, unfulfilled expectations. When seeing a client in conference I often compare risk management to the walls of a medieval castle like Sandal Castle in Wakefield near where I live. As you can see from the plan the castle has several layers of defence:

  • an outer wall and moat to keep most marauders out,
  • an inner wall to repel those who get over those obstacles, and finally
  • a keep or inner bailey for hand to hand fighting ā€“ McDuff v Macbeth sort of stuff.

In risk management, best practice approximates to the outer wall and moat. That’s enough to keep most of the hazards that can affect a business at bay,

Product liability, professional negligence and other insurance deals with nearly all of the occasional accidental slip-up or off-day that can happen to any business. But there are always a few exceptions. And that’s where Ts & Cs come in. You can’t contract out of every risk. The Unfair Contract Terms Act and more recent consumer protection legislation will see to that. But you can often use contract terms to limit risk where insurance is not available or cannot be obtained on reasonable terms.

And that’s the opening that I try to block in my Ts & Cs. In future articles I shall talk about specific Ts & Cs for websites, software and a whole load of other transactions.


About Jane Lambert

I am a barrister specializing in intellectual property, technology, media and entertainment and competition law. I specialize in helping SME (small and medium enterprises) protect and exploit their investment in brands, design, technology and the arts. SME require intellectual property (legal protection for their intellectual assets) at least as much as big business but their limited means restrict the way they can use it. Looking after such clients wisely requires skills and knowledge which have taken me years to learn.
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