The nature of the supply agreement for your business is very much dependent on the nature of the goods or services supplied and the character of the typical customer. A supply agreement drafted by skilful Business lawyers is an asset to your business and a major competitive advantage.
Often referred to as terms and conditions or Ts & Cs, the supply agreement – whether signed by both parties or printed on an order document – is a legally binding contract that governs the rights and obligations of the parties with respect to the supply and acquisition of goods and/or services.
The business terms in the supply agreement must accommodate all the factors relevant to the nature of the goods or services you supply, risk in transit, indemnity, payment, delivery, warranty etc. If the supply is to a “small business” (less than 20 personnel whether full time or part-time) or if you are a “small business”, a myriad of consumer regulation also needs to be carefully considered e.g. “unfair terms” rules.
If your business supplies goods or services and does not have an up-to-date set of standard Business Terms, its financial success is at significant risk.
Things to consider for your Business Terms
- Description of services or goods – To avoid legal complications in the event of alleged non-performance, a specification of the goods or scope of your services is often prudent
- Achievement of outcome – Do you intend to warrant that the goods or services you supply will achieve a particular outcome? If not, this needs to be specified.
- Security for payment – Unless your terms are cash in advance, you will need to consider the form of security you can conveniently obtain, e.g. a PPS
- Limitation of Liability – Subject to the Competition and Consumer Act 2010 (Cth) and the equivalent laws of the States, limitations of some aspects of potential liability to your customer is permitted
- Risk – Who takes on the risk of the goods and services supplied and when?
- Other terms – The nature of the goods or services you supply, the market for those items and the makeup of your customers will dictate what other terms and conditions should be included
For an obligation free appraisal of your current Business Terms, please email your current customer documentation to our Brisbane team who can provide a competitive estimate of fees to implement any recommended changes.
If you’re looking to identify sources of potential liability under statutory guarantees and to score a potential challenge to “unfair terms” in your supply agreement. Check out our Supply of Goods + Services: Liability Assessment Tool.