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ARE YOUR TRADING ARRANGEMENTS AND TERMS AND CONDITIONS STILL VALID?

Kim Radok24 November 2021

There are so many different ways of doing business these days and there are a wide range of customer types to match. Having the right type of trading relationship and terms of conditions, is essential in order to complete profitable business transactions and which encompasses all your different types of customers.

What is often forgotten when designing these documents is why they are required in the first place. The basic overriding reason for these documents is to have a level of certainty that both parties understand the conditions, and their responsibilities and rights each have when doing business.

These documents are also an essential component in the process of protecting your business’s assets and reputation.

At the end of the day, if you don’t get paid, the Courts will also be unable to support your business if there is no evidence of what the correct terms of supply were agreed upon by both parties. The Court does not respond well to “…he/she said, they said...” arguments without supportive and written evidence.

These documents also play an essential role in relation to the following conditions.

  1. KYC – know your customer is a priority and I don’t mean just about knowing who or the legal entity of your customer.
  2. In a number of industries, KYC is an essential part of being legally able to operate. Is your business in one of those industries?
  3. Can you deliver your goods or services as required by your customers? After all, you need to know you can actually supply your goods and services as required in a cost-effective manner.
  4. How and when will you be paid? It is no good expecting to be paid at 30 days if your customer only pays 60 days.
  5. What process is there to return goods supplied or when dealing with disputes?
  6. What legal remedies are available to you and which party pays costs if you don’t get paid?
  7. Were the final documents signed by authorised personnel for both parties?

In addition, were your documents:

  1. prepared by a fully qualified lawyer who is well versed in the preparation of contracts and legal actions/debt collection?
  2. suitable for your industry, marketplace and customer type?

In today’s complex business environment, having the right trading arrangements and terms and conditions may mean the difference between survival and the demise of your business.

To help ensure your business’s assets and reputation is maintained, these documents need to be fit for purpose. This means that the documents will be prepared by properly qualified lawyers, appropriate for the industry and type of customer in which you operate and clearly dictate the terms of trade between the two parties.

Want to know more, contact Kim at kim@creditmatters.com.au, or + 61 411 649 261, or have a look at what we offer via our website at www.creditmatters.com.au

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