As a supplier of goods and services your Terms and Conditions (T&Cs) govern your relationship with your customer. Absent a clear set of T&Cs, if something goes wrong, you’re reliant on arguments of ‘he said, she said’ to prove your position. By putting in place clear terms and conditions you will achieve certainty as to your customers’ expectations. In addition, if you’re supplying on credit (i.e. allowing time to pay), then your terms and conditions will assert your right to be paid on time.
As with all legal documents, if drafted correctly, your T&Cs should gather dust in the bottom drawer and should only be necessary when you’ve exhausted commercial avenues. In our view, customer service and relationship management will deliver far better outcomes than your T&Cs on 9/10 occasions. So why bother you ask…here are the key elements that must go into a set of T&Cs in case you need to rely upon them:
- Goods and services – what is being provided and when?
- Price – what is the price of the goods and services?
- Payment and Security – when is payment due and what rights do you have to assist you to get paid?
- Defects and Liability – do you provide any warranties (in addition to the compulsory warranties under the Australian Consumer Law) and on what terms can a warranty/defect claim be made?
- IP – intellectual property is becoming more relevant as technology and branding develop. It is essential to set out who owns what IP (e.g. brands, names, designs etc.) and what rights each party has to use that IP.
If you haven’t looked at your T&Cs in the past 5 years, you may be missing the following:
- The Personal Properties Securities Act 2009 (Cth) effectively renders a retention of title clause worthless unless you register your interest on the Personal Properties Securities Register. The concept of retention of title effectively means that the supplier owns the goods up until the point that they are paid for. Your T&Cs may need adjusting to ensure you can register your interest to guard against non-payment and/or insolvency of your customer;
- The Competition and Consumer Act 2010 (Cth) implemented the Australian Consumer Law, which imposes a number of warranties and remedies which cannot be excluded between a supplier and customer in Australia. Your T&Cs cannot exclude these warranties, but careful drafting may allow you to decide what remedy you provide your customer in the event of a warranty claim.
Rather than drafting a new contract each time you sell something, most of our clients will either include their T&Cs on their website or by reference on their quotes and invoices. It is vital that your customer acknowledges that they have received and read the T&Cs before proceeding with the transaction. This forms the basis of the contract between you and your customer.
We provide clear, concise and commercially drafted T&Cs for all forms of business.
Nick Hitchens
DISCLAIMER: This post is the opinion of the author and in no way constitutes legal advice.