Terms of Trade, What you NEED to Include
If your business provides goods or services to client’s (and really, whose doesn’t) then Terms of Trade are one of the most important documents your business can have. An appropriately drafted (read: not standard ‘off the shelf’ precedent form) ought to include clauses that protect your interest and allow for cost effective enforcement of your contractual rights. Also, and perhaps equally and importantly, Terms of Trade ought to set out your expectations of your client when they engage your services. Sometimes, the customer isn’t always right!
The Terms of Trade should cover:
What happens if payment is not received including rights to recover interest and costs;
Refund policy (remember, Australian Consumer Law may apply, so seek advice on this!);
How a customer ought to proceed if there is a problem, and how you will respond;
Default and Termination;
Ownership of work completed; and
Security clauses (an important consideration in uncertain times).
There are likely other industry specific clauses that ought to be considered too.
If your business provides goods, it may also be worthwhile having a retention of title (RoT) clause, which states that the ownership of the goods resides with the supplier until the customer fulfils obligations set out in the terms of trade, such as payment. It is important that a lawyer consider the drafting of such a term given the implications of the Personal Property Securities Act 2009 (Cth) (PPSA) on the enforcement of RoT terms.
Providing Terms of Trade to your clients satisfies full disclosure and once the customer signs the document they are legally bound to the conditions set out in the document. In many circumstances, should you evidence that the customer has seen the Terms of Trade and continues to engage your services or purchase your goods, then such conduct may amount to acceptance as well.
If you are concerned your Terms of Trade may be out of date, or you currently do not have any Terms of Trade, please do not hesitate to contact Grauf O’Brien Lawyers for an obligation free discussion.