Does Your Business Need Terms and Conditions?
Having standard terms and conditions to give to your customers or clients helps to avoid uncertainty and misunderstandings which will ultimately help with cash flow. If the rights and obligations of the parties are set out in writing this will offer clear protection to the business and will form part of any contract between the parties.
Some essential terms and conditions will include:
* A precise description of what products or services are being provided.
* When payment is due.
* Timeline for delivery of the products or services.
* Circumstances in which refunds can be given.
* Obligations owed by the customer or client to the supplier.
* Obligations owed by the supplier to the customer or client.
* Grounds for termination of the relationship and the consequences that will flow.
* The governing law of the contract between the parties such as New South Wales.
To ensure that the Terms and Conditions are incorporated into a contract between the supplier and the customer or client they must be presented to and accepted by the customer or client before the products or services are ordered. Putting Terms and Conditions on the back of an invoice is too late.
Business owners should also be aware that under the Australian Consumer Law standard form contracts (which may include standard business Terms and Conditions) should not contain unfair terms such as where:
(a) the term would cause a significant imbalance in the parties’ rights and obligations under the contract;
(b) the term is not reasonably necessary to protect the legitimate interests of the party advantaged by the term; and
(c) the term would cause detriment to a party if it applied.
Unfair contract terms can be held to be void by a Court or Tribunal so that they will not be binding on the parties.