Imagine the scenario – you’ve been running a successful web development business from a home office for a couple of years. You are getting a reputation in the local area and picking up new projects on almost a daily basis. You need help – and you need a new place to run the business from.

Within 3 months you have 2 employees and have moved to rented office space near home. All is going great and you can see that before very long you’ll need to employ someone to run the office for you and possibly another web developer too. The types of clients you are attracting are tending to be larger, and the projects you work on are into thousands rather than hundreds of pounds.

This is not an atypical business scenario – and this business may go on to grow further and generate lots of profit for its owner. But only if some preventative measures are put in place to address some tricky legal issues. Read more about the legal responsibilities that a business growing in this way takes on here.

Get an Audit!

If this scenario describes your business you would benefit from an audit, to identify the new legal responsibilities you face and confirm whether you are covered. Woolley & Co offer a fixed fee legal audit for growing businesses for just £595 plus VAT. The audit will look at all your day to day responsibilities in areas such as the business structure, the statutory books, employing staff, how you do business (including the small print) and data protection and security issues. To book an audit email info@business-lawfirm.co.uk.

Do you sell goods or services either via the web, by mail or phone? Yes - well the OFT (Office of Fair Trading) has recently published a 73 page guidance booklet on how you should deal with consumers.

In general, the guidance insists upon plain English and short sentences. The OFT suggests that as the online world is confusing to consumers by it’s nature then they should have the comfort of a clear contract which they can understand and from which they can see guarantees, returns information and so on.

You’ll know from other articles that we have published that you can limit your liability with consumers up to a point but that how you do it always has to be “reasonable”. The OFT has set out the type of contract terms that they might argue could fail that test and they include terms which:

• Make a charge for returning faulty goods
• Seeking excessive interest upon non-payment (they suggest 3% above base rate is reasonable)
• Put a time limit on return of goods for being faulty (instead return can be at any time if reasonable)

The OFT also suggests that you should not tell consumers to tick a box saying "I have read and understood the terms and conditions" – as the consumer may not have read or understood them. Instead, ask them to check a box indicating that they accept the terms and conditions. Also it is wise to make the importance of reading them very clear.

The OFT no longer approves of putting a clause in your contract saying, for example, “the parties submit to the jurisdiction of the Courts of England and Wales.” They suggest instead “We both agree to submit to the non-exclusive jurisdiction of the English Courts.”

This is, though, just the view and opinion of the OFT. It is for the Courts to decide on law and what is “reasonable” but it might be wise to follow the OFT guidance as they are then surely much less likely to choose you to pursue to Court in the first place. You can obtain the full guidance here.

If you would like us to review your current online terms of sale, returns policies and privacy policy we will do so for just £75 plus VAT. Contact Andrew Woolley.