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You have a good relationship with your customers, with some of them having used your services for years now. You don’t have any terms and conditions in place for these transactions, as you operate on the basis of trust – trust that your customers will pay you for your goods and services, trust that they would make payment on time and trust that they would not do anything that may jeopardize your business.

However, one day, one of your customers fails to make payment. You speak with your customer and they assure you they will pay you for that invoice together with the next one. The second invoice is issued and they don’t pay you for that either. This goes on for a couple of months and now you are stuck….so what are your options?

Do you continue to deliver your goods and services to them? Do you cease until they make payment? What are your rights and obligations?

These are the kinds of scenarios you can avoid, simply by having terms and conditions for your business.

1. What are Terms and Conditions?

Terms and conditions form a contractual agreement between your business and your customers. The agreement or contract, sets out the obligations of your business and your customers’ obligations and rights and can also set a cap on your liability. They provide clear guidance and parameters for:

  • Payment and delivery
  • Refunds
  • Warranties
  • Insurances
  • Indemnity
  • Liability
  • Intellectual property (where designs are involved)
  • Right to charge interest
  • Right to cancel services
  • and more

2. How is it beneficial?

A good agreement/contract:

  • Creates a legally binding arrangement between your business and a customer.
  • Ensures the smooth operation of your business, allowing you to service your customers without worrying about scenarios such as the one above.
  • Value-adds to your professional image.
  • Prevents litigation that can cost you alot of money.
  • Provides you control over how you provide your goods and services.

3. How does it work?

The terms and conditions of your business can be issued to your customers in several ways:

  1. You can provide it to them with each transaction. So this could be with your quotation and each invoice.
  2. You can have it up on your business’ website as a separate page that just sets out the terms and conditions. In your quotations or invoices, you would refer to the website link and bring it to your customers’ attention.

Take note that where you have commercial customers, they would typically have their own terms and conditions, along with their purchase order. If you are happy to proceed with what they have, then there is nothing further for you to do. However, if you want your business’ terms and conditions to apply, you must inform them of it and you can attach it to your quotation or invoice, when you respond to their purchase order.

4. How can we help?

We can assist you in several ways. We can review any terms and conditions provided to you by your customers. This provides you with the benefit of understanding what you are agreeing to and whether there are any terms and conditions that are of concern.

If you would prefer to have your own terms and conditions, we at Constructive Legal Solutions, can draft one up for your business, or assist you in reviewing any current terms and conditions you have, to ensure it is up-to-date and properly protecting your business.

You can get in touch with us via admin@constructivelegalsolutions.com.au or 1300 632 247 or via our Contact Us page

CategoryBusiness, Legal
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