Terms of Business UK: B2B Terms and Conditions for Services Template

Terms of business are the standard contract terms a supplier offers to every customer, as opposed to a contract negotiated line by line for one deal. English law treats them as part of the contract only if they are incorporated before the contract is made, which in practice means sending them with the quotation and getting the customer to accept that quotation in writing. The quotation says what you will do and for how much; the terms say what happens around it, from late payment to termination. Nothing about price is hard-coded, so the same terms work for a fixed-price project, hourly work or a monthly retainer. Other company documents, from articles to a shareholders' agreement, sit in the UK business templates section.

The key word is business. Clause 3 asks the customer to confirm it is buying in the course of its business. A consumer buying services gets non-excludable rights under Chapter 4 of Part 1 of the Consumer Rights Act 2015, and a B2B document cannot reflect those rules properly. If you sell goods online to the public, use our online shop terms and conditions for consumers instead.

Between businesses, the starting point is the Supply of Goods and Services Act 1982. Sections 13 to 15 imply three terms into a contract for services: the supplier will act with reasonable care and skill, will perform within a reasonable time where no date is fixed, and will be paid a reasonable charge where no price is agreed. Section 16 lets the parties vary those terms, but only subject to the Unfair Contract Terms Act 1977, which is the real limit on what your terms can say. Under section 2(1) UCTA nobody can exclude liability for death or personal injury caused by negligence, and under section 3 a clause in written standard terms that restricts liability for breach must pass the reasonableness test. Section 11 puts the burden of proof on the supplier and, for a cap expressed as a sum of money, tells the court to look at your resources and available insurance. A cap that a court finds unreasonable does not shrink to a reasonable figure: it simply falls away.

Late payment is governed by the Late Payment of Commercial Debts (Interest) Act 1998. Statutory interest runs at 8 per cent above the Bank of England base rate, and section 5A adds a fixed sum for recovery costs that rises with the size of the debt. The official gov.uk guidance on charging interest and recovering commercial debts explains how to claim it. Two further rules matter at the end of a relationship. Section 233B of the Insolvency Act 1986 stops a supplier terminating just because a customer company enters an insolvency procedure, and Part II of the Housing Grants, Construction and Regeneration Act 1996 gives both sides to a construction contract a right to adjudication at any time.

The obvious moment is when you start quoting for work in writing. A marketing consultancy sending a proposal, a software house issuing a statement of work and an electrician pricing a shop fit-out face the same problem: without their own terms, the contract is whatever the email chain says, plus the implied terms of the 1982 Act. A second trigger is the customer's purchase order. Larger buyers often send POs printed with their own conditions, and under the "last shot" approach in Butler Machine Tool v Ex-Cell-O the last set of terms put forward before performance tends to win. Terms that exclude purchase order conditions, and that form the contract only when you confirm or start work, put you back in control.

Retainers are another strong case, because a monthly fee needs rules on what it covers, whether unused hours roll over and how much notice ends the deal. Professional firms have a regulatory reason too: the Provision of Services Regulations 2009 require a provider to give business customers its legal status, address, VAT number, professional body and any compulsory insurance details. One edge case deserves a warning. If you are an individual who will work under a client's direction for months, the off-payroll rules make a UK contractor agreement drafted around IR35 the better fit.

The clauses below are the ones that change outcomes when a relationship turns sour.

• Formation comes first: a quotation is only an invitation, the customer's order is the offer, and the contract forms when you confirm in writing or begin work, so a purchase order cannot slip its own conditions in.
• On money, you pick a payment term in days, with statutory interest under the 1998 Act, a bar on set-off, a 10 Business Day window to dispute an invoice and a right to suspend work on 7 days' notice once an undisputed sum is 14 days overdue.
• Where should liability stop? You choose between total charges, charges for the last 12 months or a fixed insured amount, and loss of profit and indirect loss are excluded for both sides, while the care and skill duty of section 13 stays in place.
• Ownership of the deliverables either passes to the customer once paid for, with your existing tools licensed rather than transferred, or stays with you under a perpetual licence. Confidentiality lasts five years, and for pre-contract talks you can pair it with a mutual or one-way UK NDA.
• A data protection clause sets out the Article 28 processor terms of the UK GDPR as a fallback.

Termination works by notice without reason for ongoing work, or immediately for unremedied material breach or insolvency (subject to section 233B), with a payment rule for each route. A deposit is a payment on account credited against your invoices rather than a forfeit, which keeps it clear of the penalty rule in Cavendish Square Holding v Makdessi.

You start by choosing your legal form: limited company, LLP, sole trader or partnership. The wizard then asks only for the matching details, such as the registered number and office for a company or the business address for a sole trader, and whether you trade under a different name, because the Companies Act 2006 requires both names to appear. Next come your contact email, a short description of your services and the date from which this version applies.

The VAT and professional questions decide whether your VAT number appears and whether a paragraph on your professional body and compulsory insurance is added. Then you choose how you charge; if pricing varies from job to job, leave the basis to each quotation and the terms keep all three regimes. The remaining screens cover the deposit, payment term, notice period, liability cap, ownership of the work, portfolio use, non-solicitation of staff and whether disputes go to mediation before court. The preview updates as you answer.

The most expensive mistake is sending your UK terms of business after the job has started. Terms first seen on an invoice usually come too late to be part of the contract, and the customer can argue that only the quotation and the implied terms apply. Attach them to the quotation, refer to them in it and keep the signed order acceptance form or the confirming email. A close second is setting a liability cap you are not insured for. A token cap on a large project is exactly what courts strike down under UCTA, leaving you with unlimited liability.

Payment terms cause the next round of problems. Suppliers who agree 90 days to win a big client forget that the 1998 Act lets statutory interest start at day 60 unless the longer term is not grossly unfair, and Parliament is considering a Commercial Payments Bill that would cap most terms at 60 days. When an invoice is overdue, chase it in writing and, if needed, send a letter before action for an unpaid debt before issuing a claim. Finally, check the ownership choice against your business model. An agency that assigns all rights but reuses its own code or templates must keep those tools out of the assignment, which is why the template excludes Supplier Materials.