Your Credit Terms and Conditions set out how you will provide credit to your customers and your Credit Application Form is provided to your customers to allow you to assess whether you will provide credit to them and should set out all the information you need from them. You can then use this information to confirm whether they are suitable applicants to provide them with goods on credit.

Business Details

Your customers should provide you with their business details including the business entity type, i.e. sole trader, partnership or company, as well as the legal name of the business entity, for example, the registered company name including registered business or trading name. If applicable, the registered business address, their ABN and ACN, and all relevant contact details including the contact person of the organisation.

Financial Details

Your customer should also provide all necessary financial details such as all of the company’s bank details, including bank account, BSB and bank location. The customer should also provide you with their accountant’s details and the accountant’s firm to assist in assessing whether they are in a good financial position.

Directors, Partners and Principals

Your customers should also provide you will all the details of the company’s directors, partners or principals including their full name, address, date of birth and form of identification provided. You may, in some circumstances, also request the directors, partners and/or principals agree to jointly and severally undertake payment for goods and services as set out in a deed of guarantee. The deed of guarantee should set out that the directors, principals and/or partners will guarantee the payment of goods for which you are providing credit. You may also consider requesting a bank guarantee or another form of guarantee depending on the nature of the goods you are supplying.

Trade References

Your Credit Application Form should also request that the customer provide at least three trade references. They should provide the references full name, company/business name, ABN, mobile number and email address. Having this information will give you the opportunity to properly assess whether the company applying for credit should be provided with credit and whether they have a good credit history with other suppliers.

Execution Clause

You should include an execution clause which sets out that the person has read and accepted the attached Terms and Conditions for the supply of credit. You should ensure that the Credit Terms and Conditions are attached to the form, as this is preferable to providing a link or supplying the terms at a later stage. You should ensure that the customer has the opportunity to read both your Credit Terms and Conditions and the Privacy Policy which is incorporated into the Credit Terms and Conditions. You should also provide them with the separate deed of guarantee, if you require this to supply credit.

Conclusion

As a supplier, it is important to have a Credit Application Form that addresses all of the information you need from the customer. So if you’re in need of legal advice in regards to drafting a Credit Application Form and Credit Terms and Conditions, contact LegalVision on 1300 544 755 and speak with one of our experienced contract lawyers.

Edith Moss

Next Steps

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