Battle of forms
The main rule is clear and simple: first come, first served. In trade jargon, this is called 'the battle of forms'. It means that the general buying or selling conditions of the party who refers to his or her conditions first in written communication apply.
Right way
Declaring them applicable in writing must then be done properly. Otherwise, the conditions may be declared invalid afterwards. It is important that the conditions are handed over, for instance by attaching them to the offer. They must be handed over before the agreement is concluded. If you mention them on the back of your invoice, they have not been properly agreed and are therefore voidable.
If you cannot make the general terms and conditions available, refer to their location: the Chamber of Commerce or the registry of the court, stating the filing number. If you conclude the agreement electronically, you must also make the terms and conditions available electronically, stating their location. For example, your website.
Standing up to the big boys
It happens quite often in practice: a large company imposes its procurement terms and conditions on you as a business owner. What to do if they contain provisions that are unacceptable to you? You can blindly accept the terms and conditions from a commercial point of view. Or you can enter into a discussion with them and explain which provision(s) are objectionable or unacceptable to you. You will find that with a well-reasoned explanation, a large company will be prepared to disapply or supplement certain provisions of its terms and conditions. These might include provisions on liability, penalties, certain obligations and interest charges.
Credit insured? Beware!
If you are credit insured, have your own terms and conditions or - if applicable - the terms and conditions of the party you are doing business with checked by your credit insurer. For instance, insurers make it mandatory to agree on a retention of title. For Germany, an extended retention of title even applies. Also, payment terms must be within the maximum payment terms, as included in the policy. If you do not comply with this, your deliveries will not be insured. Also pay attention to pledge prohibitions. If these are included in the terms and conditions, you run the risk that your bank or factoring company will not finance the accounts receivable. By mutual agreement, buyers are often willing to lift a pledge ban.
Summary
Always try to have your own terms and conditions apply to a transaction. Make sure this is done properly. And should you nevertheless have another party's terms and conditions imposed on you, be careful not to accept them blindly. Read the terms and conditions carefully and discuss those provisions that are unacceptable to you. Especially if it does not match what your credit insurer prescribes.
This article was written in collaboration with M.A.H.J. Goyaerts, lawyer.
