Why do I need terms and conditions? 4 good reasons

General terms and conditions are not mandatory, but without good terms, you run unnecessary risks. They save you money (for example, through an exclusion clause or retention of title), help you meet your information obligations, standardize your processes, and support your accounts receivable management and cash flow. Four good reasons to arrange them properly.

Without good general terms and conditions, you are taking unnecessary risks. As an entrepreneur, you want secure relationships, and for that, the “fine print” is indispensable. In our view, these are the four most important reasons.

1. General terms and conditions save you money

Conditions are not mandatory: without conditions, the (often general) statutory rules apply, which by no means always adequately regulate your situation. This can turn out to be expensive. In a ruling by the Amsterdam Court of Appeal (ECLI:NL:GHAMS:2021:1376), a contractor had installed a central heating boiler in a hotel; following problems, the hotel demanded more than 16,000 euros in repair and investigation costs, plus interest and expenses. The claim was dismissed because an exoneration clause was included in the conditions. Without that clause, the contractor would have lost 16,000 euros — and there are even cases involving claims of more than a million euros.

Another example: if a customer goes bankrupt, you lose a delivered product without conditions; the bankruptcy trustee sells it, and you simply have to hope for payment. With a retention of title clause in your terms and conditions, the product remains yours and you can reclaim it, beyond the reach of other creditors.

2. Comply with your information obligations

You have many obligations towards consumers, including an obligation to provide information. You record this information in your general terms and conditions so that you do not have to explain everything over and over again. The Netherlands Authority for Consumers and Markets (ACM) monitors compliance with these regulations and can impose fines. Precisely because of these consumer regulations, it is often advisable to two sets of terms and conditions (one for consumers and one for business customers).

3. Standardize processes

Good terms and conditions create clarity for both you and the customer. You do not have to renegotiate every time, and problems—such as payment arrears or complaints—are handled uniformly. The customer also knows immediately how to report an issue. This improves the relationship.

4. Get your invoices paid faster

Standardization helps your accounts receivable management: you can set up a fixed collection process, one of the most efficient ways to get your invoices paid. And you can arrange matters not covered by law, such as a mandatory advance payment — which supports your cash flow.

Frequently Asked Questions

Are general terms and conditions mandatory?

No, but without conditions, the general statutory rules apply, which often do not adequately cover your situation. Good conditions limit risks and can save you a lot of money.

What is a retention of title?

A clause stipulating that a delivered product remains your property until it is paid for. If the customer goes bankrupt, you can reclaim it instead of losing it to other creditors.

Do I need two sets of conditions?

Often yes: separate terms and conditions for consumers and business customers, because consumer regulations are stricter and do not apply to B2B.

Have strong general terms and conditions drafted

The legal experts at MKB Juristen draft terms and conditions that protect you and support your cash flow. View our expertise in contract law or schedule an intake meeting .