Why you need terms of trade
Contracts such as terms of trade are a vital part of a commercial relationship. They provide a framework to enable business relationships to function. Terms of trade set out the terms under which the parties will buy and sell goods and services. It is important to have these terms agreed at the outset of the relationship. When terms are agreed upfront it is less likely there will be a dispute later on, and if there is then the dispute it is more likely to be resolved in favour of the supplier. Having no or poorly written terms of trade can lead to stress and drain your business’ financial resources.
Terms of trade cover:
Your terms of trade would usually cover the following:
- Your rights if a client doesn’t pay, and your ability to enforce payment.
- Your right to recover the costs associated with debt collection.
- Your ability to retain ownership of goods until payment is made.
- Your right to register the financing statement on the Personal Properties Securities Register (PPSR).
- Who has the obligation to insure the goods, and when that risk moves to the purchaser.
- The dispute resolution process.
- For goods, the manufacturer or other warranties that will be passed onto the buyer.
- Intellectual property rights.
- What information must remain confidential.
- Terms limiting liability if something goes wrong with the goods or services.
- Under what circumstances the terms can be varied or the contract cancelled.
The team at Davenports Harbour Lawyers is experienced at drafting terms of trade and negotiating contracts on behalf of clients.