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Your business’ terms and conditions form the contract between your business and your customers. Therefore, they should clearly set out the service or product that you provide for sale, and how you will provide it. The terms and conditions protect your business and ensure your customers clearly understand what it is you are providing and the terms under which you are doing so. When you are drafting your business’ terms and conditions, it is very important that you include a ‘payments’ clause. This clause simply refers to how payments are to be made and received and under what circumstances payments will not be allowed. This article will explain how to draft a payments clause in your business’ terms and conditions. 

The Price

When drafting the payments clause in your business’ terms and conditions, it is important to make the price to be paid clear.

If you offer fixed fee prices, you may wish to state in the payments clause that the buyer agrees to pay the purchase price advertised or agreed upon with the business when they place an order for the product or services. You should state if this includes any additional charges that you may wish to apply (insurance, delivery etc.). 

If you charge on an hourly or daily rate, you can specify how many hours a standard working day would involve. In addition, you should set out the fees that are payable for an hour’s worth of work.

You can also state that the prices are in Australian dollars and either include or exclude GST (if GST applies). Further, if there are delivery and insurance charges, you should detail whether they will be shown separately or be included in the price.

Payment Methods

The payments clause should also detail the methods by which the product or service provided by your business can be paid for by the customer. You can list all the methods of payment your business will or will not accept. Commonly accepted payment methods include:

  • cash;
  • cheque;
  • EFTPOS;
  • credit or debit cards (restrictions may apply to credit card fees you are allowed to charge a customer);
  • BPAY or online payments; and
  • direct debit.

You may be providing the product or service to the customer on credit. This means that the customer is paying in installments or at a later date. If this is the case, it is also necessary to detail: 

  • when the installments are due; 
  • in what amounts they are due; and 
  • the consequences for not paying on time. 

Some businesses may wish to charge their clients interest on late payments. For example, the product might be a service that is paid for in monthly instalments. Defaulting may result in an interest being charged on top of the advertised price for that particular month. If this seems like something your business might benefit from, it is very important that you make this clear in your business terms and conditions. If this is applicable, you should read more information about credit terms and conditions.

Other Inclusions

Once you have communicated how payment can be made, you may wish to confirm when payment will be processed. For example, the payment may be processed upon receipt of the customer’s order or once the services have been delivered. 

In the clause, you can warn your customers against making any attempt to fraudulently or unlawfully pay for the product. Moreover, you may include a provision telling your customers that their order may be cancelled if payment cannot be processed for any reason.

Key Takeaways

Business terms and conditions should include a payment clause that details how and when payments should be made. The payment clause should also outline the price to be paid. Whether that be the price advertised on the website at the time of purchase or the hourly rates that are charged. Suppose you are providing the goods or services on credit to the customer. In that case, it is particularly important to specify how and when the payments will be made. If you have any further questions, contact LegalVision’s commercial contracts lawyers on 1300 544 755 or fill out the form on this page.

Frequently Asked Questions 

What is the purpose of the payments clause in a set of terms and conditions?

The payments clause outlines how much is to be paid for the goods or services as well as how and when they are to be paid for.

How do I include the price in my payments clause if I charge hourly or daily rates?

If you charge on an hourly or daily basis, you can list the various hourly or daily rates that may apply in the payments clause.

The price of my goods changes all the time on my website. How do I make sure the payments clause stays up to date?

You can specify in the payments clause that the price of the goods is to be the price advertised or listed on the website at the time the customer ordered the goods. This will remove any ambiguity should the price change after the goods have been ordered.

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