Most businesses sell something to someone, which means that almost all companies need to have well-drafted customer contracts. Customer contracts are often used again and again, which means that poorly worded terms or unclear clauses don’t just open your company up to liabilities in one deal, but potentially in many. No matter what your product or service, it is vital to have appropriate customer contracts that serve your needs—limiting your liability and ensuring that transactions go smoothly.
In order to ensure that your customer contracts serve your unique situation well, it can be helpful to consult a contracts lawyer, even if you think you have found a good form to use online. A Priori contracts lawyer can help you draft a master agreement and navigate a breach of contract.
About Customer Contracts
Customer contracts are agreements made between a customer and a merchandiser or retailer, generally for the purchase of goods and services. Consumer customer contracts usually govern the business relationship between an average user of a good or service and a company, such as a subscription agreement or a utilities contract. Consumer contracts are somewhat limited in their construction in order to protect their lesser legal knowledge, and they tend to be non-negotiable for those that want to make a purchase. B2B customer contracts are generally more sophisticated and less bound by consumer protection laws.
How Consumer Protection Laws Affect Customer Contracts
Customer contracts that are used with the general public are much more limited than the average contract that any two parties sign, because consumer protection laws and regulations from agencies like the FTC are designed to limit prevent companies from taking advantage of customers lack of legal knowledge—and often neglect in actually reading the contract. Generally, there is a higher standard of “reasonableness” expected in the contract. That is, pricing and other terms can’t be overly skewed in favor of the company.
Many customer contracts are structured as standard agreements which both parties simply sign in order to carry out a regular business transaction. Both B2C and B2B customer contracts use standard agreements and forms that allow these transactions to be carried out without needing to negotiate a new contract. These standard agreements are especially important if non-legal personnel will be in charge of getting contracts signed by customers, because they allow a fill-in-the-blank agreement to be formed without either party needing to be qualified to negotiate terms.
Breach of Customer Contracts
Remedies for breach of customer contracts made between two companies, such as wholesale purchases, are much the same as for any other contract. Companies can pursue damages and attorneys’ fees, for example. Customer contracts between consumers and companies, however, have a few unique remedies for breach of contract that are more common.
- Rescission. Perhaps the most common remedy in consumer contracts, recession is when the contract is canceled, all money returned, and the matter dropped as if it never happened. This is what most people think of as refund clauses.
- Specific Performance. A court order can require each person or business to follow through with the initial agreement. For example, a lawsuit involving a breach of a utilities contract might require the power to be turned back on and the money owed to be paid, so that both parties carry on as before.
- Reformation. The contract is re-written or renegotiated to better suit the parties actual intentions. Essentially the contract terms give each party a do-over, so that the work requested can be completed or goods needed can be delivered on new terms.
Depending on the complexity of your needs, the cost to properly draft customer contracts can range widely. Through the Priori network, customer contracts can typically cost anywhere from $250-$5000. In order to get a better sense of cost for your particular situation, put in a request to schedule a complimentary consultation and free price quote from one of our lawyers.