These Terms of Business are designed for use by an electrician. They are in plain English and written from a practical point of view as a template for any company or sole trader who is engaged in the business of providing electrical services.
The Terms of Business are intended to be used with a short Form of Agreement and a Schedule of Rates. Templates for both these documents are included
The Form of Agreement is intended for use mainly when an estimate is required before the work starts. It needs to be completed by the company and given or sent to the client for acceptance with the Terms of Business and Schedule of Rates. If the client wants to change anything in the Form of Agreement, it may be necessary to have another one drawn up and signed, incorporating the changes.
If you are called out to do work without any form of agreement being signed, then the client should be given a copy of the Terms of Business and the Schedule of Rates before work starts.
We have also included some documentation and wording for use when the services are being provided to a consumer – ie a domestic customer – and the Consumer Contracts Regulations apply. In those cases it is a legal requirement that the client has a 14 day ‘cooling off’ period unless he waives this in writing and the consumer should be given a form of cancellation notice. Our free document Z171 contains guidance on the regulations with a link to the Government website.
To avoid later disputes it is advisable for both parties to be very clear as to the detailed scope of the services, the equipment to be installed and the price – vagueness in the specification is more likely to result in disputes than clarity.
Turning to the specific clauses in the Terms & Conditions:
These are fairly straightforward and need no explanation
This explains how the contract comes into existence. It deals with a situation where an estimate or form of agreement is provided to the client as well as where the electrician is called out to do a job right away.
3. OUR OBLIGATIONS TO YOU
The company has basic obligations to exercise reasonable skill and care, and provide services as agreed between the company and the client. If the work includes supply and installation of new equipment – e.g. a new lighting system, this is also referred to so the company can substitute an alternative if the agreed equipment is not available.
4. YOUR OBLIGATIONS TO US
The client is responsible for giving the company access to the site when they need it, for clearing the space to enable the work to go ahead and for providing facilities such as secure storage for equipment, power supply etc. Responsibility for getting planning consents is with the client.
This sets out items of work that are excluded. This will vary depending on your particular approach. In our template we exclude clearing away furniture etc., building work and redecoration (e.g. if wiring has to be taken through walls) and, as an option, removal of debris.
6. CHANGES & EXTRAS
This is designed to ensure that if a client asks for a change to the services provided by the company, the company will be paid for it at an appropriate rate. To the extent that a variation in the Services results in a change to the contract period or cost to the client, this clause sets out the company’s rights and obligations.
7. CHARGES & PAYMENT
This refers to the rates and to the form of agreement if there is a fixed price.
Under 7.2 it is made clear that when there is an estimated price, this is not guaranteed and it can change. The need for a deposit, in particular to cover the cost of equipment before it is ordered, is covered in 7.3
Invoices are payable on receipt and there is a method for dealing with any complaint the client might raise. The company also has the right to give notice to suspend the work for non-payment as well as the right to claim interest on late payment.
The statutory interest entitlement works out at 8% above base rate. Costs can also be claimed under the Act referred to in this clause. For more information there is a helpful website at www.payontime.co.uk.
8. OWNERSHIP AND RISK
Ownership of all equipment supplied by the company is retained by the company until everything has been paid for, but risk of loss or damage passes to the client when equipment is delivered to the site. The company’s liability in the event of any property damage is limited.
This will need to be tailored to the particular circumstances but under our clause the client is responsible for insuring the property and the company has to maintain public liability and employers liability insurance.
10. COMPLETION, DEFECTS & WARRANTY
This covers the situation when the contract has a commencement date and a completion date. The wording makes it clear that neither of these is guaranteed.
Under 10.3 the company is responsible for fixing defects for a specified period after the work is completed: this could be 6 months or more or less: it is up to you to insert the appropriate period. When there is a manufacturer’s warranty for equipment that has been installed – e.g. a new sound system- the company will give the client the benefit of this and it is then for the client to deal with the manufacturer if a defect appears.
11. LIMIT OF LIABILITY
This clause makes it clear that the company will not be liable to the client for losses incurred by the client, and limits the financial liability of the company under the Contract.
Legal advice is recommended here as the wording of limitation clauses may need to be adjusted to take account of particular circumstances and there is also legislation designed to protect consumers against unfair terms.
This gives the company party the right to terminate the contract if the client fails to pay or commits another breach of the Contract. Either party may terminate the contract if the other party becomes insolvent. The financial consequences of termination are covered, with particular reference to amounts due to the company.
13. COPYRIGHT ETC.
The company’s designs are owned by the company, and the client has limited rights to use them, as set out in this clause.
14. FORCE MAJEURE
Unforeseeable events such as flood and fire are covered by this clause, limiting company liability to the client.
This clause contains a three stage method of resolving disputes – first, direct negotiation, second a referral to mediation and, thirdly, the courts of England and Wales. There is information on adjudication in the Free Information (Alternative Dispute Resolution) note on our website.
This contains a number of provisions concerning notices, assignment, etc. For more detail on some of these subjects, see the Free Information (Boilerplate Clauses) note on our website.