Terms of Trade are the terms and conditions by which:
No business is too small or too big to benefit from secure Terms of Trade.
As a seller of goods or services, it is important that you have rules by which you trade with the other party. While there are certain protections set in place by statute (eg: The Australian Consumer Law), many matters are entirely negotiable. As a seller, if you clearly set out the terms of trade and bind the buyer to these terms, you galvanize your business against such matters as late payment, non-payment and effectively retaining title to the goods until paid in full. The introduction of the Person Property Securities Act (PPSA) has made retention of title more particular and you as a supplier of goods you will want to have a tight PPSA clause in your terms of trade. Without PPSA registration you could be left with a powerless clause. This is just one thing that must be considered when drafting terms of trade.
These terms are the basis on which your business trades. If you are dealing with a business bigger than yours, they might present their terms of trade to you. This can be quite dangerous as the seller, as it will usually put a greater onus that required by law on you to deliver on time and to a particular quality and at the same time relax the payment terms of the buyer. So, if you do not take the initiative and set the terms on which your business trades, you will be stuck with the terms set by the person you are doing business with, who is likely to protect the interests of their business, not yours.
Sometimes people go for a standard template, which we do not recommend at all. Terms of trade are specific to a particular business and usually a lot of money rides on getting it right.
The converse can apply when you are the buyer. If you are entering into a business arrangement with a seller of goods or services, it is important to know what you are signing and, in some cases, to negotiate those terms.
If the seller’s terms are too onerous, you can very often get those terms modified – and it is surprising how negotiable sellers can be when they want your business. The key to getting this right is to know what to ask to be changed (being outside the norm or not right for you) and then how to phrase the request to have the changes made.
Whether you are a seller or a buyer, legal advice is a must when it comes to terms of trade. They need to be right – and as watertight as possible, having regard to your circumstances – from the start.
Our Terms of Trade Lawyers are experienced in dealing with drafting, negotiating and reviewing Terms of Trade. Given that we act for Sellers and Buyers, we understand both perspectives. Getting the right legal advice will potentially save you a fortune in the long run.
For legal assistance with drafting, negotiating or reviewing Terms of Trade for your business, please either call on 1300 907 335 or please fill out the contact form on this page.
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