Is your contract always right? Or are there tricky little clauses which the courts may say you cannot rely on?
Last time, I recommended using pre-agreed compensation as a remedy with added trust. But can you go too far?
Telecoms' Loving Client-Care
If you own a mobile phone, did you read the terms and conditions before you bought or renewed it? Probably not. Did you even receive a copy of those terms or was it all done by frequent, annoying, and badly-timed calls followed up immediately with confusing emails requiring your e-signature? (Their process really does suck).
If you hate the process of renewing mobile phone contracts you are not alone. This week, a business (in the social care sector) was mightily relieved to hear that it would not have to pay a £180,000 cancellation charge that a mobile phone company had invoiced. After issues with the phone changeover, the client decided to cancel the contract – rather than ending its troubles, they got worse!
The Good: As someone who encourages clients with simple clear terms to add them to their website, I was relieved to hear the court confirm terms could be incorporated by hyperlink (phew). But the court requires the link to clearly identify the relevant terms if there are more than one – please check yours are well-titled.
The Bad: A tricky little clause in the mobile phone provider’s terms required a cancellation fee of £225 per handset. The term was not mentioned in negotiations, not included in the signed order form, not highlighted in the tiny on-line terms, not referenced in the clause headings… it was triply buried. The court said this was not good enough. If a clause is unusual or onerous you need to go the extra mile. Just because it’s in, doesn’t mean you can rely on it.
The Ugly: The statement that ‘everyone else does it’ is a very unattractive argument to run and with the judge was having none of it. The clause was still tricky because its effect was onerous and wholly disproportionate to the loss of profit and administrative costs that would be incurred by cancellation. Those losses were roughly one tenth of the sums claimed (ouch)!
There are plenty of lessons from the case which act as a reminder of previous tips:
- create a simple contract process – get your contract signed before you start
- the more important a term, the easier it should be to understand
- have user-friendly terms and bring your clients’ attention to unusual or onerous clauses
- make any limits reasonable if you want to rely on them
- pre-agree compensation