Standard terms of trade - getting them right

by Alan Knowsley - Rainey Collins Lawyers

In a recent situation a company found itself significantly out of pocket for disbursements incurred on a client’s behalf. The company’s standard terms and conditions made it clear that the customer had to pay all disbursements incurred but the Court found them unenforceable. A staff member, without management approval, had agreed to a variation of the terms to “keep the client”. The standard terms had therefore been modified at the company’s cost. 

If you use standard terms and conditions you must train your staff in their use. This includes ensuring:

  1. They are filled out; 
  2. Given to the customer before the deed is done (it is too late afterwards);
  3. Signed by the client;
  4. Signed by any guarantor; 
  5. Contain all necessary customer information; and 
  6. They are not modified without management consent. 

A copy must be retained on file to show the client’s (signed) acceptance or proof of receipt.

There are now significant penalties for using standard terms which are unfair up to $600,000 for a business and $200,000 for an individual so it also pays to ensure your terms comply and have not been declared unfair.

If any steps are missed this could be expensive.

For more information on this topic, please contact the Rainey Collins office (04 4736850) or the article author - Alan Knowsley.

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