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.