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Many small businesses supply goods and services to clients without any written terms and conditions.

Often, it is only when a customer fails to pay and costly litigation is commenced, that a business owner realises the importance of having a written contract.

We strongly recommend that you have a written contract for all your customers.

What should be included in a customer contract?

A customer contract should set out all the terms and conditions of the sale or supply.

Matters to consider including in a customer contract include:

• Your rate of charging.
• The price of services, goods or parts.
• When payment must be made by.
• What happens when payment is not made by the due date (for example, interest, legal costs, lien over goods).
• The procedure where there is a dispute (for example – over quality, service or delay).
• Obtaining a personal guarantee where the customer is a company.
• Any right of set-off.

Note: A contract should not be unfair to one party. A contract that is unfair or unconscionable may be set aside by a court.

We recommend that you consult a suitably skilled and experienced lawyer to prepare your customer contracts.