Jola Cloud Solutions' Blog

Consumerisation is affecting Terms and Conditions and unscrupulous business suppliers are taking advantage.

According to the government-backed Money Advice Centre, 84% of consumers do not read Terms and Conditions online, before they sign contracts. With some Terms and Conditions exceeding 30,000 words (the length of a novel) this is not surprising and Ombudsmen are starting to side with consumers when disputes arise.

However, there is little sympathy for company directors when they take their consumer behaviour into work. As a fiduciary officer of your company, a leader and captain of industry you have a legal and moral obligation to read contracts before you sign them. If you don’t have time then have somebody else read them. Small companies cannot afford to ask a solicitor to read every contract but most of the contractual traps used these days are obvious and a magnifying glass, not a corporate lawyer, is all that is needed.

If it relates to a technical subject, like telecommunications, ask your IT company to read it for you. If they know they are going to have to support whatever it is you’re buying they probably won’t mind and they are likely to be aware of the common traps.

Most frustrating is the company that starts a tender process, thinking they are out of contract with their current supplier, when they are not. If they have fallen-out with the supplier they may not even ask them to bid and they don’t find out until the end of the process. If they do ask them to bid the incumbent will hope they can win the deal and sign them up to another onerous contract without ever having to reveal the original terms.

Jola recently worked on a bid with a partner that lasted around 12 weeks. It involved meetings, demonstrations, proposals and references. We won the deal against three other suppliers, including the incumbent. When the customer gave the incumbent supplier the bad news they pointed out that breaking the contract would cost £40,000. The customer had to reluctantly re-sign with their existing supplier but before they did we were given the original contract to see if there was a loophole. The customer had signed to have their call charges fixed for seven years, in a market where the cost of telephone calls drops every few months.

Salespeople accept that most of the work they do is wasted but when they find out the whole process has been pointless they are understandably frustrated. When very large sums of money are involved, bids can cost thousands of pounds and there are examples of suppliers suing organisations where a tender process has been improperly run.