Your Sale of Goods Terms and Conditions set out the terms on which you will provide goods to your customers. Usually these are attached to the purchase order you provide in hard copy to the person or company purchasing your goods.

Goods, Orders and Prices

Your goods, orders and prices clause should set out how orders will be received and processed by you and that you have discretion to complete or reject orders as you see fit, based on your ability to supply the goods or the availability of products.

You should set out that it is the customer’s responsibility to confirm that their order is correct and that they have not ordered the wrong product, such as the wrong colour or size of product. Depending on how the product is purchased, you may provide an order number when they order online, or a purchase order when they order from your warehouse or showroom. You should set out in the terms the point at which a binding agreement will come into effect between you and your customers.

Payments Clause

Your payments clause should set out whether you require upfront payment for the goods, or whether you will provide an invoice to customers to pay within a certain period. You should also set out whether payment of goods might be available on credit.

Make sure to detail whether the price set out in the purchase order will or will not include delivery and insurance charges, and if it includes installation costs. You should also set out that if the customer’s payment is not able to be successfully processed, or if credit is not successfully approved, then you may cancel their order.

This clause should also set out whether you will charge interest on unpaid amounts. The standard rate is between 1.5% – 2% per month, on any amounts unpaid. Make sure the interest rate is not too high to avoid incurring a penalty, as the fees charged need to be a genuine pre-estimate of loss. You should set out that if the payments or invoices are unpaid for 30 days, you have the right to engage debt collection services for the collection of unpaid and undisputed debt, and that the customer should cover the cost of undertaking this action.

Conclusion

A comprehensive Sale of Goods Terms and Conditions, which include a well drafted goods, orders and payments clause, can reduce issues with customers in the future. At LegalVision, we provide our clients with this legal document, as well as a variety of other agreements, many of which you may need for your business. Some of these include a Privacy Policy and Website Terms of Use. So if you’re in need of legal advice, contact LegalVision on 1300 544 755 and our online solicitors will be able to assist!

Edith Moss

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