B2B Terms and Conditions of Sale template

Overview

Business-to-business terms and conditions of sale are the standard terms a supplier applies to all sales of goods or services to business customers, incorporated by reference into each order or quotation. Between two businesses, the parties have significant freedom to allocate risk as they see fit, but two statutory frameworks still shape what is enforceable. First, the Sale of Goods Act 1979 implies terms into every contract for the sale of goods — that the goods will correspond with their description, be of satisfactory quality and be fit for any purpose made known to the seller — and while these can be excluded or limited in a B2B contract, any such exclusion is only effective if it satisfies the reasonableness test under the Unfair Contract Terms Act 1977 (UCTA 1977). Second, UCTA 1977 applies that same reasonableness test to any clause excluding or limiting liability for breach of contract, negligence, or misrepresentation, and some liabilities — death or personal injury caused by negligence, and fraud — can never be excluded, however the clause is drafted. A related, frequently overlooked point: a customer that is nominally a 'business' can occasionally still be treated as a 'non-trader' under UK consumer protection law where the contract has no direct connection to its trade — this should be checked where the customer base includes very small businesses or sole traders buying outside their normal trade. When to use it: for any supplier selling goods or services repeatedly to business customers on a standard set of terms, rather than individually negotiated contracts each time. Parties: the seller (who supplies the goods or services) and the business buyer. Key clauses: incorporation of these terms into every order (and precedence over any conflicting buyer terms); price and payment terms, including interest on late payment (the Late Payment of Commercial Debts (Interest) Act 1998 implies a statutory right to interest and compensation on overdue commercial debts if the contract is silent); delivery and risk transfer; retention of title until payment in full; warranties, limited to the extent permitted by UCTA 1977; limitation of liability, with a cap and an exclusion of indirect/consequential loss, subject to the reasonableness test; and governing law and jurisdiction (England and Wales). Pitfalls to avoid: drafting an exclusion clause so sweeping it fails the UCTA 1977 reasonableness test and is struck out entirely, leaving the seller with no protection at all; omitting a retention-of-title clause, which weakens the seller's position if the buyer becomes insolvent before paying; and failing to state which party's terms prevail in a 'battle of the forms' scenario against the buyer's own purchase order terms.

Information to customize

• Seller's registered name

• Seller's registered address

• Summary of goods/services sold

• Pricing and payment terms

• Late payment interest terms

  If left blank, statutory interest applies under the Late Payment of Commercial Debts (Interest) Act 1998.

• Delivery terms and risk transfer point

• Retention of title terms

• Warranty terms

• Seller's liability cap

• Returns / rejection policy

• Effective date of these terms

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Frequently asked questions

Can a seller fully exclude liability for defective goods in a B2B contract?

No. Even between businesses, an exclusion clause is only enforceable to the extent it satisfies the reasonableness test under the Unfair Contract Terms Act 1977, and liability for death or personal injury caused by negligence, or for fraud, can never be excluded.

What is a retention of title clause and why does it matter?

It keeps ownership of the goods with the seller until the buyer pays in full, even though possession has passed to the buyer. It matters most if the buyer becomes insolvent before paying — a valid retention of title clause can let the seller reclaim the goods rather than ranking as an unsecured creditor.

Do these terms automatically apply if the buyer sends its own purchase order?

Only if the terms are properly incorporated and, where the buyer's order references different terms, the seller's terms are the ones that ultimately govern (a 'battle of the forms' issue) — a clear precedence clause and consistent practice help secure this.

What happens if a commercial customer pays late?

Unless the contract sets its own late payment terms, the Late Payment of Commercial Debts (Interest) Act 1998 automatically implies a right to statutory interest and a fixed compensation sum on overdue commercial debts.

Are these terms suitable for selling to consumers as well as businesses?

No — consumer sales are subject to the Consumer Rights Act 2015, which has stricter fairness and quality requirements than apply between businesses; a separate B2C terms and conditions document should be used for consumer sales.

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