How to write terms and conditions for your trade business

Why every tradesperson needs written terms

Working without terms and conditions is like building without foundations. Everything seems fine until something goes wrong. A customer disputes the price. Someone refuses to pay because the work was not "what they expected." A defect appears six months later and the customer demands you fix it for free. Written terms handle all of these situations before they become costly arguments.

What to include in your terms

Payment terms

State when payment is due (on completion, within 14 days, within 30 days). Specify your accepted payment methods. Include your right to charge for late payment under the Late Payment of Commercial Debts Act 1998 if applicable. For larger jobs, specify your deposit requirements and stage payment schedule. See our guide on invoice payment terms UK law.

Scope of work

Reference the quote or specification document. State that work outside the agreed scope will be priced separately and requires written agreement before proceeding. This is your primary defence against scope creep.

Variations

Explain how changes to the agreed work are handled. Any variation must be agreed in writing (email or text is fine) with a price adjustment before work starts. Without this clause, disputes about extra charges are almost inevitable.

Cancellation

Under the Consumer Contracts Regulations 2013, domestic customers who hire you at a distance (phone, online, email) have a 14-day cooling-off period to cancel without reason. If you start work within this period, you can charge for work done. State this in your terms.

For cancellations after the cooling-off period, specify reasonable cancellation charges to cover your lost time and any materials already ordered.

Defects and guarantee

State your defect notification period (how long after completion the customer must report defects for you to rectify them free of charge). Six months to two years is typical for trade work. Beyond this period, the Consumer Rights Act 2015 still gives customers rights, but the burden of proof shifts to them.

Distinguish between defects in your workmanship (your responsibility) and issues caused by materials supplied by the customer or by subsequent work done by others (not your responsibility).

Insurance and liability

Confirm you carry public liability insurance and the level of cover. Limit your total liability to a reasonable figure (often the contract value or twice the contract value). Exclude consequential losses (loss of profit, business interruption) unless you are comfortable accepting that risk.

Access and working conditions

State that the customer must provide reasonable access to the work area, clear space for materials storage, and access to power and water. Specify who is responsible for clearing furniture, protecting belongings, and any parking arrangements.

Ownership of materials

State that materials remain your property until paid for in full. This gives you a legal basis to recover materials if the customer does not pay.

Keep it readable

Write your terms in plain English. Avoid legal jargon. Number each clause for easy reference. One to two pages of A4 is plenty for most trade businesses. Longer than that and nobody reads them.

Present your terms with every quote. The customer accepting your quote means they accept your terms. Make this clear at the top of your quote: "This quote is subject to our standard terms and conditions, attached."

Practical examples of terms in action

Let's consider a practical example. You are a self-employed electrician completing a £5,000 rewiring project. Your terms state a 30% deposit is required upfront and the remaining balance is due upon completion. Midway through the project, the client requests additional lighting installations. Your terms specify that all variations must be agreed upon in writing. You email the client a revised cost for the extra work. The client approves, and you proceed with the new tasks. By having these terms, you've avoided potential disputes over unexpected costs.

Another scenario

Imagine you are a plumber hired to refurbish a bathroom. Your terms include a 14-day defect notification period. A month after completion, the client contacts you about a leaking tap installed by a third party after your work. According to your terms, you clarify that issues caused by others are not your responsibility. This ensures you don't bear undue liability.

Step-by-step: Creating your terms

1. Identify common issues: Reflect on past projects. What disputes arose? What clarifications did clients need?
2. Draft clear clauses: Use plain English, and avoid jargon. Ensure each clause is concise and to the point.
3. Seek feedback: Share your draft with a trusted colleague or mentor. They might spot gaps you missed.
4. Review legal requirements: Check the gov.uk website to ensure compliance with UK regulations.
5. Revise and finalise: Make necessary adjustments based on feedback and legal requirements. Number each clause for clarity.

Tools to assist in invoicing and terms management

Managing invoices and terms can be streamlined with the right tools. Consider using our invoice generator to automate invoice creation. For tradespeople working on an hourly basis, the day rate calculator can help you determine the right charges. Additionally, if your business is VAT registered, our VAT calculator simplifies the process of adding VAT to your invoices.

FAQs

Do I need a solicitor to write my terms?

For most sole traders and small trade businesses, no. Write them yourself in plain language. If you take on commercial contracts or large projects (over £50,000), it is worth having a solicitor review them.

Can I copy another company's terms?

Not legally, as terms are subject to copyright. More practically, another company's terms may not suit your business. Write your own based on how you actually operate, covering the situations you have encountered or can foresee.

What if a customer says they did not read my terms?

If you provided the terms with your quote and the customer accepted the quote, the terms apply whether they read them or not. This is settled law. Make sure you can prove you sent the terms (email trail, signed quote document).

How often should I update my terms?

Review your terms annually or whenever there is a significant change in your business operations or legal requirements. Keeping them updated ensures they remain relevant and legally compliant.

What should I do if a client refuses to agree to my terms?

Engage in a discussion to understand their concerns. Sometimes, clients may have specific requirements that can be negotiated. However, if their demands compromise your protection, it might be best to reconsider the project.