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As a tradesperson, you face significant risks when running your business. There is the risk of not receiving payment on time, being unable to provide the service on time and safety and legal risks. To ensure you can reduce your business risk, you must have a good set of terms and conditions. Once you have a template document that outlines your terms and conditions, you can provide this to each customer before you provide any services. A well-drafted set of terms and conditions will reduce some risks you face. This article will explore the essential clauses to include in your terms and conditions for a tradesperson.
Payment
Your business terms and conditions should set out your invoicing and payment terms. The payment clause needs to include a payment schedule that outlines the following:
- payment amounts, including deposits, taxes or additional fees;
- when payments are due;
- how customers must make payment;
- frequency of payments;
- consequences of non-payment, including late payment fees;
- how parties will handle payment disputes; and
- what happens to the payment if parties terminate the contract before completing work.
Suppose parties can negotiate the details of your payment arrangement through a quote. In that case, your terms and conditions must work in conjunction with your other business documents to ensure you get paid for your work.
Delays
The contract should include specific timeframes for the completion of the work. It may include deadlines for completing different phases of work or the whole project. From time to time, delays will inevitably occur. As such, to help avoid disputes between you and your customers, your terms and conditions should indicate the causes of any delays and the circumstances under which you will not be responsible for delays in services. For example, this may include:
- bad weather conditions;
- delivery delays on necessary materials; or
- delays caused by the client.
Your contract should outline the notification process for delays and any obligations from the client to help resolve them.
As these situations are often beyond your reasonable control, you do not have to take responsibility for such delays and any losses your customers may incur due to the delay. However, in situations where the delay might be your fault, the contract should specify how you will compensate your client for these delays. For example, you may consider reducing the contract price or seeking an extension on the completion date.
Continue reading this article below the formSafety
It is standard practice to include a term that outlines the relevant safety standards under which you will comply, such as:
- industry standards;
- regulations; and
- safe work practices.
This will help both parties have a clear understanding of their responsibilities concerning safety.
You should set out the obligations you will undertake to ensure the worksite is safe for workers and any safety measures you will implement. For example, specify in your terms any reporting requirements you will abide by, such as reporting accidents or injuries to a relevant regulatory body.
Sometimes, it is unsafe for you to provide your services for reasons outside of your control. In such instances, your terms and conditions should state that you have the right to suspend your services and provide them later.
Site Access
Your contract should set out when and how you can access the worksite, including any permissions required. It should be clear in your terms and conditions that where your customers have requested services and parties agree to a specific time, date and place, the customer is responsible for granting access to the work site. In the event that you cannot access the work site, any delays or failure to provide the services will not be your responsibility.
Whether you’re a small business owner or the Chief Financial Officer of an ASX-listed company, one fact remains: your customers need to pay you.
This manual aims to help business owners, financial controllers and credit managers best manage and recover their debt.
Liability
Under Australian Consumer Law, you must provide a repair or refund if there is a defect in your services. However, where you have performed your services with due care and skill and have not been negligent, limiting your liability for any damage your customers suffer is essential. This will help prevent you from being liable for things that are the fault of the customer or another third party.
Key Takeaways
As many risks are involved in operating as a tradesperson, it is vital to have a robust set of terms and conditions. A strong terms and conditions document can help reduce the possibility of disputes and minimise your legal risks.
If you need help with your terms and conditions, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
Your terms and conditions should include specific terms on payment, safety, site access, liability and what happens in the event of a delay.
To reduce the possibility of disputes and help to minimise risk for your business.
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