How to get your trade terms right
The battle of the last piece of paper
How can you define the best terms and conditions of trade for your company? In today's trading environment the importance of protecting your business cannot be understated. It is essential that your customers are presented with your terms and conditions at the earliest opportunity so that they know how to behave and what is expected of them in the event of any dispute arising.
An area which is often overlooked is the need for a legally drafted set of standard terms and conditions of trade which specify how your company does business with its customers. In addition, your terms and conditions of trade will also protect your company's commercial rights and seek to minimize potential liabilities in the event of a dispute arising.
At the same time, the purchaser will place orders for goods and services which will contain their own set of terms and conditions.
Your trade terms must be right for your company. A good set of terms and conditions should cover the following areas:
- Definitions (e.g. "buyer", "seller")
- Retention of title
- Terms of payment
- Notification of disputes
- Time limit for notification of disputes
- Right to interest and compensation for debt recovery costs
- Acceptance of goods
- Force Majeure
- Applicable law and jurisdication
- Warranties and liabilities
- Insolvency and bankruptcy
- Credit Management - A Guide to Risk Reduction
- Client credit risk assessment - Who do you think you are dealing with?
- Obtaining a company credit information report
- Obtaining a company bank reference
- Obtaining a company trade reference
- Customer credit risk assessments - How do you set a credit limit?
- How to get your trade terms right
- How to claim late payment fees
- Credit Management Summary - where to now?