It’s possibly the best problem any business owner can have: not enough stock to service the orders. While this might mean you’re business is selling a lot of its stock and that business is great, it also highlights the importance of having a well-drafted ‘Availability and Cancellation’ clause in the Sales Terms and Conditions.

This clause will not only explain the business’ policy in the event that there is no stock but it will also address cancelation of orders when a customer is no longer interested in purchasing the product due to its delay. A business lawyer with contract-drafting experience is the most appropriate person to draft a this clause and should certainly be consulted before you start advertising your business’ Sales Terms and Conditions on your company website.

How should an ‘Availability and Cancellation’ clause be drafted?

Get your business lawyer to draft the following provisions into the clause:

o   First of all, the clause should clearly state that all purchases are subject to availability. You may wish to add a provision that states you will do your best to ensure that stock is replenished, or that the products database on the website will be regularly updated. Either way, it’s important (to your customers and to your business model) that your business take responsibility in the event that you cannot supply the product to your client;

o   If there is a considerable delay in delivering a customer’s order, the clause must explain how the business will deal with this scenario. Explain that your business will ‘contact’ the customer using his or her contact details attached to the order and that the customer will be provided with various options, such as a refund, store credit, or a backorder (to be delivered upon arrival of more stock, for example);

o   Make sure that, upon electing ‘store credit’ or ‘delivery’, the customer is refunded any amounts paid for shipping/delivery;

Some businesses may wish to include a provision that allows the business to send the customer a product that is very similar to the original when the original is not available. This may extend to allow the business to request permission to substitute the ordered product for a product that is quite different in appearance, value and size. If this is the case, make sure a business lawyer, at the very least, reviews what you have drafted to ensure it is foolproof.

Conclusion

If your business is delivering goods from out of state or overseas, it’s not unlikely there might be a situation whereby the business will need to notify the customer of some sort of delay in delivery or inability to deliver the particular product. It might be that stock has run out, or perhaps the product has been misplaced and is being located. Either way, have a business lawyer from LegalVision look over the contract to ensure that you have not glazed over these important details.

Lachlan McKnight

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