We have talked before about what makes up a contract. We have also discussed how, sometimes, your business does not have a signed contract with every transaction (such as in retail). When that is the case, how do you make sure and protect yourself?
There are several potential businesses where this could be an issue. For the most part, if you are a point of sale business who collects payment for merchandise (or services) at the time of sale, you will not have any issues.
Unless, of course, you take checks.
How do you deal with a transaction that is relatively small, but an individual customer account can add up quickly. Think about a service industry such as heating and cooling or propane gas. These types of businesses have smaller individual transactions, but transactions happen on an ongoing (if not regular) basis. For the most part, however, you don’t want to force your clients to sign a bunch of contracts whenever they sign up with you (that could turn them away since the competition doesn’t do that). You do, however, want to make sure your policies on billing and collections are clear. You want to make sure you can collect fees and interest if it comes down to it. You also want to make sure that you can invoice as you need and that your clients cannot take advantage of your standard procedures.
Remember: a contract outlines your rights and what you can do. Not how you must operate.
So, if you are in this boat as a retail/service business who needs to have some type of legal terms for your customers, so you can enforce your rights and you are protected when you need to collect, how do you do it?
Acceptance of Legal Terms Doesn’t Require Signing
The issue you must deal with whenever you are trying to make sure your customers are subject to your terms, but you don’t necessarily want them to sign it is “Acceptance”. You need to make sure your clients have the opportunity to review the terms and that they have accepted the terms in some way.
Think about the online world. You rarely have to “sign” any terms you agree to. You simply acknowledge that you have read them. (You know, the biggest lie on the internet)So, how can you take that same idea into the real world? How can you notify your customers of your terms and policies without having them sign a bunch of contracts?
Create a Welcome Packet With Your Legal Terms
You want to make a good impression on your customers. Create a welcome packet that includes information on your products and services and what you can do for them. If you are in the service industry, give them the information on any emergency hotline and even some tips and tricks on how to get the most out of what you provide. In all of this, include your terms.
Tell Them About Your Legal Terms In Your Follow Up Campaign
You are building your list right? You are collecting information from your customers and following up with them. In the follow up campaign welcoming them as a new client and giving them all the information they need, you can give them the link to the terms for your services.
Post Your Legal Terms At Checkout
If you are a point-of-sale retailer, post your terms at check out. Or, if they are too long to post, post signs on how to find them at checkout. That way, your customer “knows” they exist before making a purchase.
Put Your Legal Terms On Your Invoices or Quotes
Including your terms on any invoice that you provide can be effective in enforcing certain terms or warranties, but is not very helpful in collecting on the invoice where the terms are located. The reason is that they received the terms after the service or product. It is hard to enforce an obligation to pay attorneys’ fees or collections cost if they “agreed” to it without knowing they did. You will have a difficult time proving acceptance of that term.
The better option is to provide the terms in the quote. As in: “any service or product you purchase will be subject to the terms on the back of this proposal.”
Tell Them About the Legal Terms (And Make Them Available)
If you have a long sales process, make sure the prospect is aware of the terms throughout the process. That way, when they do purchase, they have “accepted” the terms you told them about during the process.
Customers Expect Legal
It isn’t that people are truly afraid of legal, it is that they view a small business as a person and not a company. That is what you want, but you have to overcome that hurdle when you put a legal contract in front of them. Here are a few tips to getting your agreement signed the first time.
Let’s Discuss It!
How do you make sure your customers accept your terms?