In the busyness of everyday things to do in your business, establishing appropriate terms and conditions can easily drop to the bottom of the list. But having established terms and conditions with all your clients can really help you, and your clients for that matter, to avoid disputes and misunderstandings.
Terms and conditions form the basis of your trading relationships. They will protect your business and provide clarity as to what should happen in any given situation. They can be the difference from chasing up late payments to ensuring your business gets paid first.
Naturally, the content of your terms and conditions will depend on your business’ requirements however, we have made a few suggestions that you should seriously consider including.
This one will quite possibly be right at the top of your list. You should state when payment is due in terms of delivery or possibly the invoice date. Also consider the issues of cash-on-delivery or some other pre-agreed terms.
Make sure that your customers have a clear definition of the goods and services that will be provided. Whilst this might be a little difficult in some service areas, including a section that defines your words can help prevent any misunderstandings or misinterpretation. Delivery timeframes should also be included as well as the method of delivery and any costs associated with delivery.
If you offer any guarantees or warranties, make sure that you explain them in the terms and conditions. Their timeframes and limitations also need to be clearly explained.
If you offer credit
Include the credit terms, credit limit and any penalty or default terms. It may also be necessary to discuss conducting reference checks. You may also think about the necessity to request upfront payments for larger credit accounts.
Specify what will happen if either party does not deliver or pay on time. Also consider what notice is required to get out of an agreement or if one party wants to end the relationship.
Retention of title
A retention of title (ROT) clause means that you, the supplier, can retain the ownership of goods already supplied until they have been paid for by your customer. Take note too that in respect to ROT, that you should register your interest in accordance with the Personal Property Security Act to remain enforceable.
Review your T&Cs
If you have been putting off writing and distributing your T&Cs it could well be worthwhile to give us a call. Having someone else to discuss ideas could be very beneficial. You might also consider doing a periodic review of your T&Cs to ensure they have remained relevant to your current business practices.