Terms and Conditions of trade for your business

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The Terms and Conditions (Ts & Cs) of Trade go to the heart of any relationship with a business and its customers and/or clients.

It is important that any business has clear and unequivocal Ts & Cs to ensure commercial expediency when forming a contract with their customers. It is the cornerstone of being able to manage that relationship.

In today’s modern world where contracts for the provision of goods and services can be formed in person, over the phone, online or through a myriad of different ways, it is important that a customer understands that a business has Ts & Cs available and easily accessible.

Due consideration must also be given to how your Ts & Cs will be affected if the customer is overseas and in another jurisdiction.

It is also important to distinguish between Ts & Cs for different types of orders if that is something unique to your business.

Communication in simple language which is clear and concise is not negotiable. It is imperative that a customer understands when and under what circumstances they have accepted a business’s offer to provide the goods and services.

What should be included in your Terms and Conditions?

Some of the matters a business must consider the following matters when drafting your Ts & Cs:

  • Payment terms
  • Consequences for not paying
  • Delivery times and terms
  • Can you contract your obligations to third parties?
  • Warranty terms
  • What is the refund policy?
  • Limitation of liability under statutory warranties
  • When does title pass in the goods?
  • Will there be a provision for security interest in the goods under the PPSA and subsequent registration on the Personal Property Securities Register (PPSR)?
  • What is the standard that any services must comply with?

Also, it is not worth trying to put in Ts & Cs which will not be enforceable due to the impact of Australian Consumer Law (ACL) where businesses who supply goods and services are taken to give certain consumer guarantees that cannot be contracted out of, including guarantees as to such as:

  • Acceptable quality
  • Fitness for any disclosed purpose
  • Due care and skill
  • Reasonable time for supply
  • Exclusion of all and any warranties
  • Exclusion of all liability even for defective goods or services

Other types of clauses will be impacted by legislation regardless of what is in the Ts & Cs. By way of example, the ACL provides that if a supplier uses a standard form consumer or small business contract which contains an unfair term, the term will be considered void.

A business’s Ts & Cs will usually be considered a standard form contract as they will be prepared in advance and not be subject to negotiation. The ACL provides examples of unfair terms, which include provisions that allow one party but not the other to:

  • Assign the contract
  • Avoid or limit performance
  • Renew or not renew
  • Terminate the contract
  • Vary the price without given the customer the right to terminate the contract
  • Vary the terms of the contract

To avoid the unfair contracts regime, you can allow customers the right to negotiate terms and conditions or to clearly notify the customer of which Ts & Cs in the contract give unilateral rights to the business.

At FC Lawyers we have considerable expertise in drafting Ts & Cs for both large and small businesses in a variety of industries.

Contact our team today to discuss your options in drafting Ts & Cs for your business, or if you have current Ts & Cs, to review them to ensure they are the best fit for your business.

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