Generally, the most common concerns for manufacturing businesses is to be paid on time and limit their liability for any risks which are beyond their reasonable control. One of the best ways to protect your interests is to get professionally drafted business terms and conditions. The set of terms and conditions is an essential legal document, as it forms the legal relationship between you and each customer.
This article looks at the typical clauses which go into terms and conditions used by manufacturers with their customers.
Firstly, your customers need to know how they can order from you. Your terms and conditions should clearly set out the order process. For example, is the customer required to place an order online? Or is the customer required to complete a particular order form?It is important that your terms and conditions are clear on the order process, and when an order will be confirmed. This will help avoid disputes between you and your customers.
The Payment clause is a very important section in your terms and conditions. In this section, you need to address when payments are due, whether credit will be granted to ongoing customers, and what the consequences of non-payment are.
A well-drafted payments clause should include a right for you to seek debt recovery services and charge interest for non-payment.
It is good business practice to let your customers know the date they can expect to receive their products and meet these dates!
However, if you use a third party service provider, there may be times where you are unable to meet particular deadlines, at no fault of your own. In these instances, it is important that your terms and conditions have clearly stated that you will not be responsible for the failure of third party service providers where you have taken all reasonable steps to ensure on time delivery. This will help mitigate your liability for late delivery.
Limitation of Liability
Accidents can happen, and perhaps a product that you have created does not meet a particular requirement or causes some sort of damage to your customers.
In such an event, it would help if your terms and conditions comprehensively cover your liability. It is quite common to have in a commercial agreement and/or terms and conditions that, to the extent allowed by law, you will not accept responsibility for any loss which occurs to your customers as a result of your products. This may include loss of profits or harm to third parties. This is, of course, subject to Australian Consumer Law.
The limitation of liability clause is an important one and should be drafted carefully, as manufacturers have particular obligations under the law which cannot be contracted out of. If you are unsure of how to draft a clear and enforceable limitation of liability clause, you should seek the assistance of an experience contract lawyer.
Getting business terms and conditions for your manufacturing business is a great way to ensure you get paid and reduce disputes with your customers. If you want professionally drafted and tailored business terms to protect your business to the greatest extent possible under Australian law, speak to one of our contract lawyers today.