If you are in the business of supplying goods and services and do so on an informal basis without written terms of trade, then you may find yourself in a position where disputes arise which are expensive and time consuming to resolve. Disputes often arise over payment terms, with a supplier incurring bad debt for not being paid. In order to minimise your risks, we recommend that you have in place written terms of trade which you present to clients as a way of clearly identifying what your respective obligations are to each other.
Your terms of trade will vary depending on the nature of your business and the goods and services being supplied. Well written terms of trade will address a number of matters including:
- the nature of the goods or services being provided;
- the price payable by the client for the provision of the goods or services;
- payment terms;
- penalties for late payment and your rights on default;
- who bears the risk and insurance in the goods;
- reservation of title and PPSA securities;
- warranties; and
- how variations to terms are made.
Your terms of trade should be presented to your clients prior to entry into the contract. As part of this it is important that you bring to your client’s attention certain key provisions of the terms of trade and that your clients acknowledge that they have read and understood the terms before entering into the contract. Malley & Co Lawyers are well conversed in drafting well written terms of trade for a variety of businesses. We welcome you to contact us to discuss your business and best practice for entering into commercial contracts with your clients.