Standard Terms & Conditions are important in many businesses. They provide the rules under which the business supplies its goods or services. It is important to regularly review these terms to ensure that they reflect your requirements.
1. Ensure your terms are suitable for your business.
Very frequently we see terms which are brief templates from the internet or copied directly from another entity. These may exclude provisions required for your particular business, including (without limitation) when title and risk in the goods pass to the customer, items that are specific to your business that are not included in a generic template or which jurisdiction apply to the terms (as many templates refer to foreign laws). This can make the terms difficult to enforce if you are in a dispute with a customer.
2. Determine whether your terms sufficiently protect you if clients don’t pay.
Depending on what you are selling or providing, relevant remedies could include charging interest on outstanding amounts, withholding further delivery of goods or services, or terminating the agreement. Where you are selling goods on credit, a well-drafted retention of title clause is critical, with rights to recover goods from any premises occupied by the customer if they are in default.
3. Consider what happens if you cannot deliver your goods or services due to circumstances outside of your control.
With COVID-19, many businesses have had to face lockdowns and delays in supply chains. A “force majeure” clause will relieve a party from liability for events outside of their reasonable control. Such events will need to be specified in the contract, and usually include “Acts of God” such as fires and floods. To avoid doubt, we recommend that such clauses explicitly refer to epidemics/pandemics and any government actions in response (i.e. lockdowns and border restrictions).
These are only some of the many considerations when reviewing commercial terms. The experienced commercial team at Rouse Lawyers would be pleased to assist. If you have any questions, please contact us on 07 3648 9900.