Commercial terms
What is terms of business?
Terms of business are the agreement between an agency and a hirer covering rates, charges, transfer fees, liability and how the relationship works.
They have to be agreed before supply to be reliable. Terms sent afterwards, or referred to in an email footer, are exactly the terms that get challenged when a transfer fee is claimed.
The Conduct Regulations constrain what they can say — transfer fees require the extended hire alternative, and some provisions are unenforceable however clearly drafted.
Rate structures and what is included in them are the operational content: whether the rate covers employer costs, holiday and the margin determines whether an assignment is profitable.
What goes wrong in practice
- Supply starting before terms were agreed.
- Transfer fee provisions that omit the extended hire alternative.
- Rate build-up not documented, so margin erosion is invisible.