1. Introduction: What is Drafting Terms and Conditions and Why is it Crucial?
Drafting general terms and conditions is an essential step for any entrepreneur who wants to protect their business from legal risks.General terms and conditions are the standard agreements and rules for a company and its customers, which set out the mutual rights and obligations in areas such as warranty, payment and liability. In this guide, you will learn what drafting terms and conditions entails, why it is important, and how you can create your own terms and conditions step by step.
Drawing up general terms and conditions goes far beyond copying a standard document. The Civil Code sets out clear rules on when provisions apply and which provisions may be unreasonably onerous. For start-up entrepreneurs, it is crucial to understand that good general terms and conditions not only fulfil legal obligations, but also protect against liability and possible disputes. It is particularly important for start-up entrepreneurs to have general terms and conditions, as they often have little experience with legal risks and disputes. General terms and conditions help to limit legal and financial risks for the company, such as risks relating to liability or unpaid invoices. Avoid unreasonable provisions in the terms and conditions; they must not be unfair to the other party. Take changing legislation and market conditions into account and adjust your terms and conditions if necessary.
In this comprehensive guide, we cover the legal definition according to the Civil Code, the difference between B2B and B2C regulations, a practical step-by-step plan for drafting terms and conditions, common mistakes, and concrete examples from practice. Whether you want to draw up terms and conditions yourself or have them drawn up by a specialist solicitor, this information will help you make the right decisions. Engaging solicitors to draw up terms and conditions prevents important elements that are necessary in the event of disputes from being omitted. By using legal assistance, you make contracting more efficient and secure, as you do not have to renegotiate terms and conditions with customers every time.
2. Understanding General Terms and Conditions: Key Concepts and Definitions
2.1 What are General Terms and Conditions?
Terms and conditions are clauses that are drawn up for use in multiple agreements, with the exception of core provisions such as price, quantity or product specifications. This definition comes directly from Article 6:231 of the Civil Code. Terms and conditions are written provisions that accompany every agreement. It is important to understand that not every provision in a contract is automatically a term and condition.
The law sets two core requirements:
- Repetition objective: The provisions must be drafted for use in various contracts
- Exclusion of core terms: These regulate additional matters such as delivery, payment terms, warranty and liability
Synonyms that you often encounter are terms of delivery, contract terms, or simply “terms and conditions”. In practice, every company that regularly enters into agreements usually uses general terms and conditions to clarify rights and obligations.
2.2 Legal Framework
The Civil Code devotes an entire section (6.5.3) to general terms and conditions. The most important articles are 6:231 to 6:247, with special attention to:
- Black list (Article 6:236): Provisions that are always unreasonably onerous and are therefore not permitted in general terms and conditions
- Grey list (Article 6:237): Provisions that are presumed to be unreasonable and where the burden of proof lies with the entrepreneur
- Application and delivery: How and when terms and conditions apply
The difference between B2B and B2C regulations is crucial. Consumers enjoy extensive protection, while business customers have more contractual freedom. The black and grey lists only apply to agreements with consumers and not to business customers. Consumers enjoy legal protection that protects them against unreasonable terms in general terms and conditions. The Consumer Authority actively enforces these rules and can impose fines for violations. The black and grey lists only apply if you do business with consumers. These lists do not apply to business customers, which offers more flexibility in the contract terms.
3. Why Drafting Terms and Conditions is Important for Entrepreneurs
Drawing up general terms and conditions protects businesses in several ways against legal and financial risks. Research shows that companies without clear terms and conditions are three times more likely to be involved in costly disputes than companies with good general terms and conditions.
Protection against liability: Well-drafted terms and conditions limit liability for indirect damage and set clear limits on claims. It is important to apply clear terms and conditions to every product or service so that customers know where they stand in advance and your general terms and conditions apply to every transaction. This is especially important for products or services where damage can occur.
Clarity about rights and obligations: When a dispute arises, clear provisions ensure that both parties know where they stand. Your terms and conditions ensure transparency towards the customer and prevent misunderstandings, which shortens proceedings.
Operational efficiency: Standard terms and conditions eliminate the need for negotiation with each new agreement. For companies that enter into many contracts, this saves considerable time and money.
Legal compliance: Certain terms and conditions are required by law in many industries. Examples include the right of withdrawal for online shops and the statutory warranty for products.
4. When are general terms and conditions mandatory?
Although general terms and conditions are not legally required for every company, it is strongly recommended that you draw them up. General terms and conditions protect your company against legal risks and provide clarity for both you and your customers. In some sectors, trade associations require their members to use general terms and conditions. This ensures that all affiliated companies follow the same basic rules, which increases transparency and reliability for consumers.
In addition, the absence of general terms and conditions can cause problems with regulators such as the Consumer and Market Authority. Especially when you supply products or services to consumers, you are expected to set clear and fair terms and conditions. In certain cases, such as online sales to consumers, it is even mandatory to include specific provisions, for example regarding the right of withdrawal.
In short: even though drawing up general terms and conditions is not always a legal requirement, it is essential for the protection of your business. Check whether your trade association requires the use of general terms and conditions and ensure that your terms and conditions meet the requirements of the Consumer Authority.
5. Grey List and Black List: What is and is not allowed?
When drawing up general terms and conditions, it is important to take into account the grey list and black list from the Civil Code. These lists contain provisions that are considered unreasonably onerous for the consumer.
The black list contains provisions that are always prohibited in general terms and conditions when doing business with consumers. These include completely excluding liability or unilaterally changing the agreement without valid reason. Such provisions are invalid by definition and are not permitted by law.
The grey list contains provisions that are presumed to be unfair. This means that these provisions are only valid if you, as an entrepreneur, can demonstrate that they are reasonable in your specific situation. Examples include an excessively long notice period or limiting the statutory warranty. The burden of proof lies with the entrepreneur.
It is therefore very important to check your general terms and conditions for provisions that are on the grey or black list. This will prevent your terms and conditions from being declared (partly) invalid and protect your business from legal conflicts with consumers.
6. Comparison table: Options for drawing up general terms and conditions
| Option | Cost | Time investment | Legal quality | Suitable for |
|---|---|---|---|---|
| Drafting yourself | € 0 – € 50 | 10-20 hours | Basic to moderate | Simple services |
| Industry conditions | € 50 – € 200/year | 2-5 hours adjustment | Good | Standard trading companies (members of industry organisations often use general terms and conditions drawn up by the industry) |
| Specialised solicitor | € 1,500 – € 5,000 | 3-12 hours of consultation | Excellent | Complex business operations |
| Online templates | € 25 – € 150 | 5-10 hours | Moderate to good | Start-up entrepreneurs |
Recommendation: For start-up entrepreneurs, industry-specific terms and conditions are often the best choice. They offer a good balance between cost, quality and time investment. Legal support is recommended for complex products or services.
7. Step-by-step guide to drafting general terms and conditions
Step 1: Needs analysis and preparation
Start with a thorough assessment of your company-specific risks and needs. Ask yourself these questions:
- Do I sell to consumers, business customers, or both?
- What liability risks do my customers run when using my products or services?
- Do I provide a continuous service or a one-off sale?
- What payment terms do I apply?
- How do I arrange delivery and retention of title?
Preparation checklist:
- [ ] Company registration with the Chamber of Commerce
- [ ] Overview of products and services
- [ ] Identification of target group (B2B/B2C)
- [ ] Risk assessment per product/service
- [ ] Collect existing contracts and terms and conditions
- [ ] Clear written record of the assignment and associated terms and conditions
Step 2: Drafting and structuring the content
Good general terms and conditions should cover at least the following topics. These topics must always be included in the general terms and conditions to provide clarity and legal certainty:
Essential provisions:
- Applicability and definitions
- Offer and acceptance
- Prices and payment terms
- Delivery and transfer of risk
- Retention of title
- Warranty and liability
- Complaints and disputes
- Applicable law
Regularly check the content of the general terms and conditions and ensure that these provisions remain up to date.
Additional obligation for consumers:
Additional requirements for consumers: When concluding agreements with consumers, a statutory cooling-off period of 14 days applies, during which consumers have the right to terminate the agreement. This offers them extra protection and security when making purchases.
It is a legal requirement to give consumers the opportunity to view the terms and conditions prior to entering into the agreement. When the customer takes note of the terms and conditions and enters into the agreement, they automatically accept them. This emphasises the importance of clear communication and accessibility of the terms and conditions.
- Right of withdrawal and statutory cooling-off period
- Statutory warranty information
- Contact details and company information
- Information about any costs
Pro tip: Make sure the terms and conditions are easy to find on your website and always refer to them in quotations and contracts.
Step 3: Legal Review, Filing of Terms and Conditions, and Implementation
Check your terms and conditions against the blacklist and grey list in the Civil Code. Provisions that are always unreasonable:
- Exclusion of liability for intent or gross negligence
- Excessively long payment terms (more than 30 days for consumers)
- Unilateral powers of amendment without valid reason
Implementation steps:
- Upload terms and conditions to your website with a clear link
- Add a reference to all quotations and contracts
- Ensure that customers can download or print the terms and conditions
- Train your staff in their application
- Schedule an annual review for changes in legislation and regulations. Take changing legislation and market conditions into account and adjust your terms and conditions if necessary. The customer is only bound by the general terms and conditions if they have been clearly communicated. Keep proof that you have provided the terms and conditions, for example, a statement of agreement or confirmation that the customer has read them.
- Upload terms and conditions to your website with a clear link
- Add a reference to all quotations and contracts
- Ensure that customers can download or print the terms and conditions
- Train your staff in their application
- Schedule an annual review for changes in legislation and regulations
8. Changing the Terms and Conditions
Changing general terms and conditions is possible, but there are strict rules attached to this. It is particularly important to proceed with caution in the case of ongoing services, such as subscriptions or service contracts. Business customers generally enjoy greater contractual freedom, but the legal rules are stricter for consumers.
If you wish to amend your general terms and conditions, you must communicate this to your customers in a timely and clear manner. The general terms and conditions themselves must include an amendment clause that specifies the circumstances under which you may make changes. In addition, consumers have the right to terminate the agreement if the change is not favourable to them. This protects consumers against unilateral changes that worsen their position.
For business customers, you can usually take more liberty, but here too it is wise to always announce changes in writing and to allow a reasonable period of time before the new terms and conditions take effect. This prevents ambiguity and possible disputes about the applicability of the amended terms and conditions.
9. Filing General Terms and Conditions
Filing general terms and conditions with the Chamber of Commerce or the court is not required by law, but it can offer advantages. By filing your general terms and conditions, you can easily demonstrate which version of the terms and conditions was in force at a given time. This can be very important if a dispute arises about the content of the terms and conditions in the past.
Filing provides extra transparency and can increase your customers’ confidence. Please note: filing general terms and conditions does not mean that you no longer have to actively communicate them to your customers. You remain obliged to offer your customers a reasonable opportunity to take note of the terms and conditions prior to concluding an agreement.
In short, filing general terms and conditions with the Chamber of Commerce or the court is a sensible step for extra security, but it does not replace the obligation to properly inform your customers.
10. Declaring General Terms and Conditions Applicable
It is essential that you declare your general terms and conditions applicable before entering into an agreement. You can do this by explicitly stating in the agreement, quotation or a separate document that the general terms and conditions apply. In addition, you must ensure that the customer has actually had the opportunity to take note of the terms and conditions before the agreement is concluded.
Including a clear reference to the general terms and conditions in your contracts and communications prevents discussions about their applicability. Also ensure that the terms and conditions are easy to find, for example via a link on your website or as an attachment to a quotation. Only then are the general terms and conditions binding and can you optimally protect your business against legal risks.
By consistently declaring your general terms and conditions applicable, you comply with the legal rules and prevent provisions from being rendered ineffective due to insufficient transparency.
11. Common mistakes when drafting general terms and conditions
Mistake 1: Copying terms and conditions from other providers without modification This often leads to provisions that are not appropriate for your business operations. Dutch market-specific rules may differ from, for example, English general terms and conditions.
Mistake 2: Use of unreasonably onerous provisions from the blacklist Provisions that deprive consumers of all their rights are not only invalid, but can also result in fines from the Consumer Authority.
Mistake 3: Unclear wording resulting in a favourable interpretation The law stipulates that unclear provisions must be interpreted in favour of the other party. Therefore, ensure that your language is clear and unambiguous. If a provision in the general terms and conditions is ambiguous, the interpretation most favourable to the consumer will be followed. This can lead to unexpected legal risks for the entrepreneur.
Mistake 4: Not correctly informing customers about applicability If you do not give your customers a reasonable opportunity to take note of the terms and conditions, they are not binding.
Pro Tip: Have your terms and conditions checked regularly by a specialist solicitor, especially in the event of changes to your business operations or new legislation and regulations.
12. Practical example: Drafting terms and conditions for a webshop
Case Study: “Webshop StartupX avoided £15,000 in damages thanks to correct terms and conditions”
Initial situation: StartupX launched a webshop for electronic gadgets without terms and conditions. After three months, a dispute arose when a customer returned a damaged product and demanded full compensation for consequential damage to other equipment.
Steps taken:
- Needs analysis: Identification of liability risks for electronic products
- Right of withdrawal implementation: Correctly designed 14-day statutory cooling-off period
- Limitation of liability: Exclusion of indirect damage during normal use
- Warranty scheme: Clear distinction between statutory warranty and commercial warranty
Final result:
- Dispute settled within legal frameworks
- Savings of €15,000 in damage claims
- Increased customer satisfaction through clear rules
- 40% fewer complaints due to better information
| Before implementation | After implementation |
|---|---|
| Uncertainty about rights | Clear expectations |
| 3 legal proceedings/month | 0.5 proceedings/month |
| Average processing time: 6 weeks | Average processing time: 1 week |
13. Frequently Asked Questions about Drafting Terms and Conditions
Q1: Are terms and conditions mandatory for my business?
A1: Terms and conditions are usually not legally required, but they are strongly recommended for risk protection. For webshops, certain conditions, such as the right of withdrawal, are mandatory under consumer legislation.
Q2: Can I use general terms and conditions from BOVAG or other trade associations?
A2: Yes, trade associations often require the use of their standard terms and conditions or make them available. However, check whether they fully match your specific business operations and adjust them where necessary.
Q3: How much does it cost to have terms and conditions professionally drafted?
A3: Between £300 and £1,000, depending on the complexity and specialisation required. For simple services, a specialised solicitor can often suffice by adapting standard terms and conditions.
Q4: Do I need to have different terms and conditions for private individuals and business customers?
A4: Yes, consumer protection requires adapted terms and conditions for B2C transactions. Business customers have more contractual freedom, while consumers enjoy extra protection under the law.
Q5: Do I need to file my general terms and conditions with the Chamber of Commerce?
A5: Filing general terms and conditions is not mandatory, but it can be useful as proof of the content at a given moment. For industry terms and conditions, this is often done by the industry association. General terms and conditions can be filed with the Chamber of Commerce or the court, which increases accessibility and transparency for customers. The general terms and conditions remain available to customers after filing.
Q6: Can I unilaterally change my general terms and conditions?
A6: Yes, but only under strict conditions. You must inform customers in advance of any changes and offer a reasonable notice period. For ongoing services, additional rules apply regarding when and how you can amend your terms and conditions.
14. Conclusion: Key Points When Drafting Terms and Conditions
Successfully drafting general terms and conditions requires attention to five key points:
- Legal protection: Ensure that your terms and conditions comply with the Civil Code and do not conflict with the black or grey list
- Company-specific content: Adapt standard terms and conditions to your specific products, services and risks
- Correct implementation: Make terms and conditions easy to find and refer to them consistently in all communications
- Regular updates: Schedule an annual review to incorporate changes in legislation and regulations
- Professional assistance: Engage a specialist solicitor or barrister for complex business operations or high liability risks
First steps today: Start with a needs analysis of your business risks and determine whether industry terms and conditions are sufficient or whether you need customised terms. In all cases, ensure that you enter into agreements with complete transparency about your terms and conditions.
Remember: good general terms and conditions are an investment in the legal security of your business. Not only do they prevent disputes, but they also ensure a professional image and trust among your customers. For more information and advice, please contact Law & More.