Reading time: 3 minutes

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.

Webinars

How to Recover Unpaid Invoices

Thursday 13 May | 11:00 - 11:45am

Online
What do you do if your customers don't pay your invoices? Attend this webinar to learn about how to recover unpaid invoices.
Register Now

Trade Marks 101

Thursday 17 June | 11:00 - 11:45am

Online
Your trade mark is one of the most valuable assets of your business. It is therefore crucial to understand how to protect your trade mark, avoid disputes, and prevent competitors from infringing on your rights.
Register Now

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. From just $119 per week, get all your contracts sorted, trade marks registered and questions answered by experienced business lawyers.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • 2020 Excellence in Technology & Innovation – Finalist – Australasian Law Awards 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice – Winner – Australasian Lawyer 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer