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Communicating and securing acceptance of the General Terms and Conditions of Sale

Communicating and securing acceptance of the General Terms and Conditions of Sale Having General Sales Conditions (GSC) is good. Communicating them to your customers and getting them to accept them is even better. In fact, it’s not enough to have GTCs for them to apply to all your transactions. There are two conditions for your customers to respect them: they must have read them, and they must have accepted them. It is the seller’s or service provider’s responsibility to ensure that these two conditions are met. We have recently assisted two customers in disputes in which the terms and conditions of the General Terms and Conditions were central.

Inclusion in the quotation of the requirement to read and accept the General Terms and Conditions.

In the first case, our customer wishes to sue an IT service provider who is alleged to have committed faults in the performance of his services. These errors have caused our customer a significant loss of sales, which he intends to hold the service provider liable for. However, in accepting the service provider’s quotation, our customer ticked a very common box stating that he had “read and accepted the General Terms and Conditions”. When we become aware of them, these same terms and conditions contain a so-called “limitation of liability” clause which prohibits our customer from holding the service provider liable for any damage arising from the service, such as loss of sales. If he hadn’t accepted such conditions, we wouldn’t have been forced to look for other, more complex defense options. Don’t forget that you’re never obliged to accept terms and conditions, especially when you’re working on a B-to-B basis.

Sending the terms and conditions with the quotation for signature

Our second customer is an IT service provider with GTCs drawn up by a legal professional, in this case DESRUMAUX AVOCATS. He sends out his GTCs with his quotations and asks customers to sign them. But sometimes (not to say often), he forgets. Faced with a non-paying customer, he cannot enforce all the clauses in his GTCs that would enable him to settle the dispute more quickly, and in particular the very important jurisdiction clause. Instead of litigating in BORDEAUX, our customer was forced to take his case to a court in Eastern FRANCE, with all the costs and uncertainties that a distant procedure entails. What’s more, if the customer were to dispute the quality of his service, he could not invoke an obligation-of-means clause or a clause limiting his liability to defend himself if he had not had his GTCs signed, which provided for such restrictions.

How do I communicate my terms and conditions to my customers?

The terms and conditions must be communicated to the customer, who must acknowledge having read and accepted them. Please note that this must be done before the sale or the start of the service, otherwise the GTCS do not apply to this sale or service. Apart from that, there is no real rule. In practice, however, GTCs are often communicated in the form of a link, with a box to be ticked signifying reading and acceptance, at the time of purchase or when a quotation is signed. However, there’s nothing to prevent you from adopting other means of communication, such as having them signed directly by the customer via a digital signature platform, like Yousign, for example. If you have any doubts about the content of your terms and conditions or the way in which you communicate them to your customers, don’t hesitate to ask for our assistance.
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To whom are your General Terms and Conditions of Sale addressed?

The first mistake in General Sales Conditions (GSC) is not knowing who you’re talking to! Our firm recently carried out a mission to proofread and correct the GTCs of dozens of e-commerce sites, and we often noticed this basic error: our customers want to sell only to consumers or only to professionals, but this is not clearly specified in their GTCs. In fact, we recently defended a business customer before the Commercial Court, who had bought on a site dedicated to private individuals, benefiting from attractive conditions reserved for private individuals, without knowing that the offer was not aimed at him. The seller had not clearly defined the clientele he was targeting, but was claiming tens of thousands of euros in damages from our customer. We relied on the customer’s own General Terms and Conditions of Sale to assert his good faith, and obtained a decision in his favor.

Why is it important to specify the target clientele in your GTCS?

General terms and conditions of sale vary according to the clientele you are targeting. If you’re targeting professionals, you might consider including exclusive warranty clauses for hidden defects or a jurisdiction clause, which will greatly reduce the risk and cost of future litigation. If you’re dealing with consumer customers, then there’s a long list of compulsory clauses that you must include in your GTCS, on pain of penalties.

Is it possible to have several versions of the GTC?

Apart from legal obligations, your T&Cs reflect your business rules, which may differ depending on your target audience. As a no-show restaurateur, you can ask for pre-payment by credit card for any table booked by a private customer. But if the customer is a professional organizing a business lunch with a specific menu, the reservation and deposit payment process is likely to be quite different. To be effective both before and in the event of a dispute, terms and conditions must be extremely clear. Even better is to segment them according to the target clientele.

How do I know if my GTCS are compliant?

Several customers had purchased model GTCs from legaltech websites. These were neither complete nor compliant, and even included clauses that worked against them. Other customers had home-made GTCs, which would not have protected them very well in the event of a dispute. Worried you might be affected? We can review your terms and conditions and suggest any improvements that will help you defend yourself in the event of a dispute.
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Communicating General Sales Conditions in the hospitality sector

Communicating General Sales Conditions in the hospitality sector

The obligation to communicate General Sales Conditions (“GSC”)

There is no per se obligation to communicate GTCs to a customer. If your customer is a professional, Article L. 441-1 of the French Commercial Code applies: “any person engaged in production, distribution or service activities who draws up general terms and conditions of sale is required to communicate them to any buyer who requests them for a professional activity”. This means that GTCs must only be provided at the request of the business customer, and only if GTCs exist. If your customer is a consumer, then Article L 111-1 of the French Consumer Code applies. This sets out a list of information that you must provide to your customer before concluding a contract. This information may be provided in the form of a general terms and conditions of sale, or in any other form. Although the drafting and communication of GTCs is not compulsory, it is strongly recommended, and is standard practice in the business world. In the event of a dispute with a customer, your GCS will protect you. However, if you have drawn up GTCs and wish them to apply, in accordance with article 1119 of the French Civil Code, you must : (i) to have brought them to your customer’s attention (ii) And your customer must have accepted them

The form of communication of the GCS to a customer

The most common way of communicating GTCs to a customer is electronically. This poses no particular problem, as long as you can ensure that the customer accepts them. For example, when ordering over the Internet, it is customary to have the customer tick a box indicating that he “accepts the General Terms and Conditions of Sale”, while indicating where he can read them if he has not yet done so. Acceptance of the General Terms and Conditions may also be evidenced by a signature on an order form, stating that the customer has read and accepted the General Terms and Conditions. To ensure the enforceability of each clause, they must all appear in the General Terms and Conditions accepted at the time of signature. The fact that a condition was included or known when a previous contract was concluded, for example, is not sufficient to render it enforceable in a more recent contract. Similarly, no clause may be included in an appendix to the contract or to the GTC that has not been signed or electronically accepted by the customer. Please note that some clauses are subject to special formalities. Because of their sensitive nature, they must be presented with particular care. This is the case, for example, with the retention of title clause, which must be agreed in writing, at the latest, at the time of delivery. If you would like to draw up or revise your General Terms and Conditions of Sale, or if you would like advice on how to present them to your customers and obtain their consent, please do not hesitate to contact us.
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Terms and conditions of sale in the hotel and catering industry

According to article L 441-1 of the French Commercial Code, general sales conditions are the “sole basis for commercial negotiation”. They contain all the conditions under which you and your customer are bound. It is therefore particularly important that your General Terms and Conditions of Sale contain not only the mandatory clauses defined by law, but also any additional clauses that may protect you in the event of a dispute. Incomplete or poorly drafted General Sales Conditions can backfire.

Mandatory information in the General Terms and Conditions of Sale for services

Elements of price determination

Your general terms and conditions of sale must indicate how your prices are set. For example, for a hotel service, you could specify that prices are set according to room type, number of nights, booking dates, etc., and that the price of each room is available on the establishment’s website.

For a catering service, you can specify that prices are set according to the menu of the day, available on site and/or online, and that these prices include all taxes.

It’s also in this section that you can anticipate additional costs, for adding a bed to a room for example.

Terms of payment

Terms of payment cover a range of information: accepted payment methods, payment deadlines, conditions of application and interest rate for late payment penalties, the amount of the fixed indemnity for collection costs, etc. These clauses are not to be neglected. These clauses are not to be neglected: while they protect you in the event of litigation, they can also deter dishonest partners and prevent disputes.

This section also includes information on deposits and other pre-authorized payments you may be required to make when booking a hotel or restaurant. The general terms and conditions of sale must specify the amount to be paid on reservation, the terms of payment, and any conditions for reimbursement of these sums. Once again, these clauses protect you from cancellations and other dishonest partners.

For more information on pre-authorization in the hotel and restaurant sector, please refer to our article ” Bank imprinting: how to implement it without risk “.

Information specified in article L 111-2 of the French Consumer Code

The French Consumer Code requires service providers to supply their customers and other partners with information on their contact details, their service provision activity and other contractual terms and conditions, the list and content of which are set by decree by the Conseil d’Etat.

Mandatory information in General Terms and Conditions of Sale for consumers

Articles R 111-1 et seq. and R 221-1 et seq. of the French Consumer Code list a range of information that professionals must provide to their consumer customers.

Optional information that can be added to your General Terms and Conditions of Sale

In addition to the compulsory information, the General Sales Conditions may contain a set of clauses which also regulate the relationship between you and your customers or partners.

Cancellation clause

It’s up to you to define the conditions under which you will accept a customer’s cancellation of a hotel or restaurant reservation, and the financial terms involved. In the case of accommodation or catering services, consumers do not have the 14-day right of withdrawal provided for distance contracts.

Customer default clause

Particularly in the hotel sector, this clause can include a security deposit or bank imprint to cover any damage or theft committed by the customer during their stay.

Limitation of liability

It limits the amount of damages that can be claimed in the event of the seller failing to meet one of its commitments. For example, if you are unable to find your customers a cab to take them to the station at the end of their stay, you cannot be held responsible if they miss their flight.

Jurisdiction clause

Jurisdiction clauses determine which court in which city is to be seized in the event of a dispute. In principle, these clauses can only be applied to business customers. This means that, in the event of a dispute being brought before a court, you won’t have to endure proceedings far from your head office.

Your General Terms and Conditions of Sale are intended to apply to all your transactions, and will form the basis of any dispute. It is essential that they are complete and intelligible. We can help you draw them up so that they not only comply with legal requirements, but also reflect the terms and conditions you wish to put in place.

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Abusive breach of contract in commercial relations

You are negotiating a contract with a current or future business partner. You’ve been negotiating for months, incurring various costs in the process. Suddenly, your partner no longer wishes to commit to you and puts an end to your negotiations. Your business partner may not be in the right. We explain how to identify an abusive breach of business relations and limit your financial losses.

Who is affected?

The main players in commercial relations are companies and their partners. These partners may be customers, suppliers, producers or distributors. Whether they are SMEs or major groups, solid commercial relationships are essential to business development.

What are “talks”?

Discussions, also known as the “contractual negotiation phase”, are characterized by written or oral exchanges that take place before the parties conclude a contract. Depending on the complexity of the relationship between the parties, and the financial and economic stakes of the contract to be formed, the negotiation phase can be more or less lengthy. In principle, this pre-contractual phase is characterized by a principle of freedom. In other words, each party is free to propose what it wishes, ask for what it wishes, and terminate negotiations. There are, however, certain rules governing negotiations, such as the obligation to provide information and confidentiality, as well as the termination of talks. In this way, the party who terminates negotiations may be held extra-contractually liable (also known as liable in tort) for improperly terminating talks.

What is meant by “abusive termination of talks”?

Pre-contractual negotiations must be conducted in good faith (article 1104 of the French Civil Code). In application of this rule, a fault during the talks may give rise to extra-contractual liability (in tort). To identify a fault, judges take into account the reasons given for the breach, the legitimate expectations of the other party in concluding the contract, the means/expenses already made available to the other party, the duration and progress of the talks, the complexity of the negotiations and the absence of legitimate reasons for the breach. In all cases, if a fault is identified, in order to engage the liability of a party, it is also necessary to identify damage (harm suffered by the other party) and a causal link between the two. These are the conditions laid down in Article 1240 of the French Civil Code. In concrete terms, you’ve been talking to one of your prospects for 8 months with a view to signing a contract. You’ve even started making investments to be able to honor the future contract: buying larger premises, purchasing more equipment, etc.

Penalties for abusive termination of commercial relations

If a party is able to demonstrate a fault in the breach of talks, a prejudice and a causal link between the two, the judge may admit the abusive nature of the breach. In this case, as the parties are not bound by a contract, only delictual liability can be engaged. This means that the prejudice suffered by the party who suffered the breach will be compensated by damages. The compensable prejudice may take the form of costs incurred during the negotiation phase, or the cost of cancelling the contract. On the other hand, the compensable loss cannot correspond to what a party could have gained from the conclusion of the contract, since no contract has been concluded.

How do I break off talks?

It is therefore possible to break off talks freely, provided you do not do so abusively. It is important to avoid causing prejudice to the potential co-contractor, particularly if he has already advanced funds, made improvements or if breaking off negotiations will have numerous consequences for him, particularly financial. In order to break off negotiations while avoiding causing the other party any prejudice likely to engage your liability in tort, it is entirely possible to reimburse the expenses incurred by the other party, for example.

What can I do if I suffer prejudice as a result of an abusive breach of contract?

Abusive breaches of contract may enable you to hold the person with whom you intended to enter into a contract liable in tort. If you consider that the breakdown of the talks is abusive and causes you financial prejudice, you can sue the other party for reimbursement of the sums advanced or payment of damages. For further information, please do not hesitate to contact us.