What Are Terms and Conditions?

Terms and conditions – sometimes called T&C, standard terms, or general conditions of sale – are the contractual terms that govern a business transaction between a seller and a buyer. In commercial dealings, terms and conditions are frequently appended to a purchase order or invoice, either as fine print on the back of the document or as a separate attachment. In the modern era, it is also common for terms and conditions to be referenced by a hyperlink that the buyer must click to access and agree to before completing an online transaction.

Russo Law LLC drafts, reviews, and negotiates terms and conditions for businesses throughout New York and New Jersey, including manufacturers, distributors, suppliers, and service providers.

How Terms and Conditions Work in Commercial Transactions

In many business-to-business transactions, the buyer and seller never negotiate a formal contract. Instead, the seller issues a purchase order or invoice that incorporates its standard terms and conditions, and the buyer either accepts those terms expressly or by proceeding with the transaction. The terms and conditions then govern the relationship – including delivery obligations, payment terms, warranties, liability limitations, and dispute resolution.

A common issue in commercial transactions is the so-called “battle of the forms” – where both the buyer and seller have their own standard terms and conditions, and each party’s documents purport to incorporate different and conflicting terms. Whether the buyer’s terms, the seller’s terms, or some combination controls the transaction is a question that depends on the specific facts and applicable law, and is a frequent source of commercial disputes.

What Do Commercial Terms and Conditions Typically Cover?

Description of goods or services – what is being sold or provided
Pricing and payment terms – the price, payment due dates, and consequences for late payment
Delivery terms – when and how goods are delivered, and when risk of loss transfers from seller to buyer
Warranties – the seller’s representations about the condition and quality of the goods or services at the time of the transaction, and any limitations on those warranties
Returns and rejections – the buyer’s right to reject non-conforming goods and the process for doing so
Limitation of liability – caps on the seller’s total liability and exclusions of consequential or indirect damages
Indemnification – which party bears responsibility for losses caused by defective goods or other specified events
Dispute resolution – how disputes are handled, including governing law and venue

Frequently Asked Questions – Terms and Conditions in New York and New Jersey

Are terms and conditions on the back of an invoice or purchase order legally binding?

They can be, but enforceability depends on whether the other party had reasonable notice of those terms and an opportunity to review them before the transaction was completed. Courts in New York and New Jersey have addressed these questions in various contexts, and the outcome in any specific case depends on the facts. The Uniform Commercial Code (UCC), which governs the sale of goods in both states, provides rules for how conflicting or additional terms in commercial documents are treated. See the UCC Article 2 overview at Cornell Law School’s Legal Information Institute.

What is the “battle of the forms” and how does it affect my terms and conditions?

The battle of the forms arises when a buyer and seller each submit their own standard terms and conditions as part of a transaction, and those terms conflict with each other. Under the UCC, additional or different terms in an acceptance may or may not become part of the contract depending on the circumstances. The practical takeaway is that a business relying on its standard terms should be deliberate about how those terms are presented and accepted – relying on boilerplate fine print without ensuring the other party has actually reviewed and agreed to it creates uncertainty about what terms actually govern the deal.

Should my terms and conditions include an arbitration clause?

Many businesses include arbitration clauses in their commercial terms and conditions. Whether an arbitration clause is appropriate for your business depends on the types of transactions you enter into, your customer base, and your risk profile. An attorney can advise on whether and how to include a dispute resolution provision in your commercial terms.

Schedule a Free Consultation

If you need commercial terms and conditions drafted or reviewed for your business in New York or New Jersey, call 929-262-1101 or schedule a free consultation with Russo Law LLC.

The information on this page is general in nature and does not constitute legal advice. Every situation involves unique facts, and no specific strategy or recommendation can be made without a full review of your circumstances.