Your business’ sales terms and conditions form the contract between your business and your customers. It should clearly set out the service or product that you provide for sale, and how you will provide it. The terms protect your business and ensure your customers clearly understand what it is you’re providing and the terms under which you’re doing so.

When you’re drafting your business’ Sales Terms and Conditions, it’s 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.

What is the importance of a ‘Payments’ clause?

When drafting the ‘Payments’ clause in your business’ Sales Terms and Conditions, there are several important provisions you should be adding to the clause:

o   The buyer agrees to pay the purchase price that is advertised on the company’s website when he or she places an order for the product or service including any additional charges that you may wish to apply (insurance, delivery, etc);

o   Explain that the prices are in Australian Dollars and include GST (if this applies);

o   If there are delivery and insurance charges, decide whether they will be shown separately or be included into the price. It’s important to be as clear as possible;

o   Explain how the product will, or can, be paid for. Credit card? Cash? PayPal? What methods of payment will your business accept? Make it plain and clear that you will accept payment via these methods;

o   Once you’ve communicate how payment can be made, explain that the payment will be processed upon receipt of the customer’s order;

o   Warn your customers against making any attempt to pay for the product though fraudulent or unlawful means; and

o   Finally, include a provision that tells the buyer that his or her order will be cancelled if payment cannot be processed for any reason.

Conclusion

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, and 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’s very important that you make this clear in your Sales Terms and Conditions. Get in touch with one of LegalVision’s contract lawyers to make sure this is legal in the circumstances.

Lachlan McKnight
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