What about the Fineprint? The Terms of Trade Question.
We all get used to just accepting the fineprint when we buy goods or services these days. But this fineprint is important as it describes the legal relationship between a business and those who interact with it. That fineprint is called terms of trade.
The purpose of terms of trade is to make the terms and conditions under which businesses operate clear from the beginning. If you're in business, it is important any such terms are agreed to by your customers before you provide your goods or services. Conversely, if you receive terms of trade from a business or supplier, you should consider them carefully and seek legal advice before agreeing to them.
In best practice, terms of trade should be sent by a business direct to the client who then signs them and returns a copy. The terms may also include a link to the company’s website where more detailed information can be obtained.
In some instances however, getting signed terms of trade is impractical. An example of this would be if you sell goods through a website. Agreement in this situation can instead involve displaying the internet trader's terms of trade on its website and requiring customers to click a button confirming that they have read and agreed to them before completing the sale.
Privacy of customer's personal information is important particularly with the capabilities of modern technology and social marketing techniques. Many of us now want to know exactly how our personal information can and/ or will be used, so terms of trade should spell this out.
Some clauses to consider in terms include:
· Quotations, Orders and Acceptance;
· Price and payment terms;
· Remedies for default;
· The process to be followed should a client/customer have a complaint or concern;
· Whether any guarantees or warranties are required;
· At what stage the passing of risk and/or title in goods occurs;
· Whether you are able to limit or exclude your liability in any areas (as permitted by
· Whether any security is to be provided in return for the supply of goods or services; and
· How personal information will be dealt with.
These types of clauses in terms of trade can't breach applicable legislation such as the Consumer Guarantees Act and the Fair Trading Act, which are both designed to favour consumers of goods and services. Recently Noel Leeming was fined a whopping $200,000 for misleading its customers about their rights under the Consumer Guarantees Act in relation to their rights to seek refunds or replacements for faulty products.
Overall, terms of trade should be tailored to the needs of the individual business, as each industry or profession has their own inherent risks. They're an important part of doing business.
If you would like advice on terms of trade for your business, or if you are presented terms of trade as a consumer and would like advice, please email or call Mat.