Business Terms of Trade

Published in Business Law, Tim Brown

Regardless of whether your business is small or large and whether your supply goods or services or both, it is important to have a “terms of trade” in place.

A business’s terms of trade (or terms and conditions) is essentially a contract between the business and its customers. It usually governs the following:

  • The price of the goods or services (including quotes, whether prices are GST exclusive or inclusive, whether prices are subject to change);
  • The payment terms (when payment is due, whether a deposit may be payable, how payment can be made, penalties for late payment);
  • The warranties the business gives as to the quality and suitability of the goods or services it provides;
  • Limitations or exclusions of liability of the business;
  • Whether and what type of security might be required if the business offers goods or services on credit;
  • The rights of either party to terminate the contract;
  • A process for resolving disputes between the business and its customers.

Many businesses attach their terms of trade to the back of their job order sheets or quote sheets. This means that every job requested by a customer or quote given by the business has a copy of the terms of trade attached to it. It is a good idea to also include a copy on your business website if you have one. You can update or amend your terms of trade from time to time as needed.

If possible, it is best practice to get customers to sign the job order/quote to confirm that they accept and agree to be bound by the terms of trade. However, as this is not always possible, you can state in your terms of trade that the customer agrees to be bound by the terms of trade if they proceed with their order. You must ensure that you provide the customer with a copy of the terms of trade before you supply the goods or services.

If your business does not have terms of trade or if your terms of trade may need to be updated, please give us a call. We are happy to help.

DISCLAIMER: The content of this document is general in nature and is not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.

Tim Brown has specialised in business/commercial law for over 13 years. Tim is an expert in all business law matters, including establishing new businesses, buying and selling existing businesses, restructuring and succession planning, commercial contracts, capital and debt funding, corporate governance and compliance.

For further information and advice on business terms of trade, please contact Tim.

Tim Brown (LLB, BCom)
Director / Solicitor

First Floor Conway Building
188 High Street
PO Box 576
Rangiora 7400