GENERAL TERMS AND CONDITIONS: That darned small print

General Terms and Conditions (GTC) are used when contractual provisions are pre-formulated for a large number of contracts. They have the advantage that you don't have to think about what needs to be included in the contract for every new transaction.

But be careful: General terms and conditions often contain unnecessary or impossible information, as the example of Konditorei L. shows. In the small print, it says: "The person ordering a wedding cake must arrange for someone to return the cake stand before they leave on their honeymoon." And further: "We retain title to products that we have manufactured, delivered or handed over until the outstanding invoice has been paid." The inclined reader wonders where the ownership should be asserted if the eaten wedding cake is never paid for. To the guests or to what has been eaten?

If you use your own general terms and conditions with your customers, you should note the following:

- GTC are not legal norms. They only apply if they are accepted by the parties when the contract is concluded. Once the contract has been concluded - for example with the invoice or delivery bill - it is too late.
- In the case of contracts with consumers, they must have the opportunity to take note of the GTC. It is sufficient if the GTC are printed on the back of the order form and there is a note on the front.
- The GTC must be formulated in a comprehensible manner in dealings with consumers. If this is not the case with a clause, it must be interpreted by the court in the event of a dispute. If the interpretation does not lead to a clear result, the less favorable variant for the author - i.e. you - applies according to the so-called ambiguity rule.
- The small print must not contain any clauses that the consumer should not expect and that have atypical, extraneous or surprising content.
- Have your GTC reviewed by a specialist if you have not already done so.

If you conclude a contract with a supplier, it is quite possible that they will also use GTCs. You then need to clarify which GTCs should apply if they contradict each other on certain points. Your own, the supplier's or none at all? If the supplier's GTCs are to apply because they are referred to in the offer, you should read them carefully from start to finish. This is because they may contain unfavorable rules, such as the following:

- Delay in delivery: A delay in delivery does not entitle the customer to cancel the order. Claims for damages are excluded.
- Warranty: In the event of defects, the customer must make a warranty claim directly to the manufacturer.
- Warranty rights: In the event of a warranty claim, the goods will be repaired or replaced free of charge at the discretion of the seller. Withdrawal from the contract is excluded.

If you are unsure whether you have understood the supplier's T&Cs correctly, you should ask a specialist for advice.

Do you need legal advice?
The Beobachter Advisory Center offers you and your employees expert advice by telephone on legal issues relating to your company - 6 months for just CHF 99. Order the consulting package for SMEs at www.beobachter.ch/kmu or 0800 83 0800.

Book tip:

Supplier invoices are piling up, goods are not being paid and the bank is turning off the money tap - high time to act. This SME handbook is a practical toolbox with instruments for emergencies. But it also covers long-term protection: collecting receivables, getting new money, maintaining and acquiring customers or drawing up contracts correctly. This comprehensive guide helps small business owners before things get dicey.

Authors: Irmtraud Bräunlich Keller, Gabriela Baumgartner, Michael Krampf, Hans Schoch, 248 pages, hardcover, 1st edition June 2010, Beobachter-Buchverlag, ISBN: 978-3-85569-435-8, retail price: 45 Fr.