A self-aligning terminal block in a tool terminal assembly having electrical contacts for connecting to a removable battery pack to be used in conjunction with hand-held power tools having a rechargeable battery. The electrical contacts of the terminal block are preferably female terminals with two resilient guideways that taper away from each other at distal ends, preferably forming an enlarged entry area to help receive and align the battery terminals as they are inserted into narrow sections of the female terminals. The guideways can be aligned with battery terminal blades functioning as electrical contacts of the battery pack. The self-aligning terminal block has clearance on at least one side to allow lateral movement within the tool body to keep constant contact with mating electrical contacts of the terminal block and the battery pack.