Although you are not obligated to draft general conditions, it can prevent a lot of issues. With this so-called ‘fine print’ you can drastically limit business risks, because you set the rules between your client and you in writing. Ergo: it is clear for all parties what can be expected. When any disagreements occur about -for example- payment, warrantee or delivery time, the rule that has been set in the general terms and conditions takes legal precedent.
What are general terms and conditions?
General terms and conditions provide with rules of the game of sale and purchase. The conditions you set are applicable to every agreement between you and your clients. They do not focus on the particulars of a good or service: These you can set in the offer or order confirmation. The general conditions are, therefore, standardized conditions. Your general warranty period, for example, is included in the conditions, but the price and amount of a specific delivery is not.
How do you set up your general terms and conditions?
When you want to set up general conditions, you can do that any way you desire. However, it is advisable to take certain guidelines into consideration and make sure a legal advisor or your branch organization also takes a look. This way you prevent missing certain things which would consequently undermine your own legal position. Instead of writing your conditions from scratch, there are numerous online free examples and templates of conditions that you can use. However, make sure that you adjust them, so they apply to your specific activities, and you do not miss anything.
Many branch organizations also set up conditions for their members. When you are a member of a branch organization, the organization can help you. Sometimes they even require you to make use of their general conditions.
Lastly, you can also outsource the general conditions to a legal advisor. Explain what is important and request a document that is easy to understand and legally sound.
What should the general conditions include?
There are a number of standard conditions that are included in almost all general terms and conditions. It is advisable to include these in your general conditions as well. The Chamber of Commerce includes the following:
- Invoice (non-binding or binding, period for acceptance);
- Transport (who pays for transport, insurance, import duties);
- Delivery time (force majeure);
- Payment (payment term, collection costs, interest);
- Retention of property (ownership is only transferred after payment);
- Warrantee (if so, under what conditions);
- Handling of disputes (court or arbitration);
- Liability (limitation, amount for compensation);
There are also certain items you cannot include in your general terms and conditions. To ensure that the conditions remain reasonable, there is a legal black and grey list with conditions. These prevent that -for example- you can include that you can suddenly change the price after the agreement in the fine print. When you are faced with conditions that are unreasonable in your opinion, it is advisable to find out whether the condition is invalid on the basis of the grey or black list.
Filing your general conditions
If you so desire, you can deposit the general terms and conditions. This means that your general conditions will go into storage with the Chamber of Commerce. The benefit is that your clients can request your conditions from a central location and that is easier to prove what has been agreed upon based on the general conditions. Although you are not required to deposit your general conditions, it is advisable to do so.
There are some expenses associated to depositing your general conditions. The Chamber of Commerce will invoice you €18,- per document, per year. For this amount the conditions are stored and can be requested by your clients. The content of the conditions are not verified. You are entirely responsible for the content.
Application of the general terms and conditions
Have you set up the general conditions and stored them at the Chamber of Commerce? Then, these are not automatically legally binding in agreements between you and your clients. The conditions are only binding after you have informed your client of the general conditions. You have a so-called information requirement: you will have to inform your client about the general conditions prior to the agreement. You will have to both physically and digitally hand over the documents. For example, you can do this by including the general conditions when handing over the offer itself. When you require your client (prior to the purchase of goods or services) to confirm the order, you can include a confirmation that the client agrees to the general conditions.
Alter or cancel the general conditions
When general terms and conditions apply to your company, it is important to keep these up to date. When your company changes, your general conditions might also need to change. Check periodically if the conditions still meet the standard of your operation. Also, when you are facing a dispute with a client, you can ask yourself whether a change or update of the general conditions could prevent a similar conflict in the future. A legal expert can help you alter your general conditions.
Have you stored your general conditions? Make sure to inform the Chamber of Commerce by handing over the new document in its entirety. Indicate clearly that it concerns the replacement of an existing document. You do not want two documents circulating simultaneously.
When you want to end the storage of your general conditions, you can do that by informing the Chamber of Commerce in writing. The Chamber of Commerce will then cease to invoice, starting the year after you have cancelled the storage.
This brochure* from the Chamber of Commerce will tell you more about general terms and conditions. For more general information about doing business in The Netherlands as an entrepreneur, the English homepage of the Chamber of Commerce is a good starting point. You can read more about starting your enterprise in this article. When you want more information about creating invoices, click here.
*Need help with Dutch websites? Please feel free to contact us.