Terms of Business Template: B2B Guide

What Are Terms of Business?

Terms of business (also called general terms and conditions or standard trading terms) are the default legal terms that govern your business relationships. They cover everything from payment and delivery to liability and dispute resolution, and they apply to all engagements unless specifically overridden.

• Terms of business apply to all client relationships unless a bespoke contract is negotiated
• They must be properly incorporated — simply having them on your website is not always sufficient
• For B2B relationships, terms are largely negotiable and courts give significant weight to agreed terms
• Regularly review and update your terms to reflect changes in law and business practices

Incorporating Terms into Contracts

Terms of business are only enforceable if they are properly incorporated into the contract. This means the other party must have reasonable notice of the terms and an opportunity to review them before agreeing. The battle of the forms — where each party tries to impose their own terms — is a common issue.

• Reference your terms on every quote, proposal, and order confirmation
• Provide a copy of the terms or a clear link before the contract is formed
• The last set of terms sent before acceptance typically wins the battle of the forms
• Consider requiring explicit acceptance of terms via a signature or checkbox

Essential Clauses for B2B Terms

Your terms of business should be comprehensive enough to cover common scenarios but readable enough that clients actually engage with them. Overly long or legalistic terms are often ignored, which defeats their purpose.

• Payment terms: net 30 days is standard in the UK; specify interest on late payments under the Late Payment of Commercial Debts Act
• Limitation of liability: cap at contract value or a reasonable multiple; exclude indirect losses
• Intellectual property: clarify ownership of deliverables and any licence rights
• Termination: allow termination for breach with a cure period, and termination for convenience with notice

Key Takeaways

• Terms of business are only enforceable if they are properly brought to the other party's attention before the contract is formed.
• The last set of terms communicated before acceptance typically prevails in a battle of the forms scenario.
• Keep terms comprehensive but readable — terms nobody reads provide a false sense of security.