You must make sure your terms and conditions are in order before you make a deal.

Here are some questions you should be asking yourself when putting together your terms and conditions.

1) What’s the best way to protect my business from late/non-payments?

Make sure you have terms and conditions that govern your relationship with your customer. Also make sure to specify when payment should start.

2) How am I going to incorporate terms and conditions?

In an ideal world, these would be in a single document. A way you can do this is to get your customer to sign an account application form for payment which includes the terms and conditions.

3) What do I do about quotations and invoices?

If accepted, quotations can become part of the contract itself. Generally, invoices come are post-contract, but some companies also put their terms and conditions on the back of their invoices. The exception to this rule is when there has been continuous and consistant dealings between the parties involved, and therefore the terms and conditions have been incorporated over a period of time.

4) What do I do if a customer pays late, or doesn’t pay at all?

If your customer is regular and continually pays late, encourage them by incorporating a clause that means they have to pay interest on late payments. You could also try including a clause that allows discounts if people pay on time. Another idea to include is an option to reduce the payment period if your client becomes insolvent.

5) How do I get products back if a customer doesn’t pay or becomes insolvent?

Make sure to include a clause in your contract that means that you legally own goods until they are paid for. This also gives you the right to recover any goods from your customer, even those from different deliveries that have been paid for.

6) What if the goods have been sold on or used?

If your product has been sold on, and this third party doesn’t have notice to your terms and conditions, the third party is not bound by the ownership clause and will therefore own the goods. If your goods have been used to manufacture a larger article, you will be able to establish ownership if it can be removed from the larger article without damage. However, if they have been manufactured into something and have lost their identity, you cannot get them back.

7) Customer has gone into administration?

If your terms and conditions have a retention of title clause, contact the administrator immediately to gain access to the site and identify your goods (take photos while there if you can). You should then try to agree with the administrator to stick labels to these items. You should also prepare an inventory and get the administrator to co-sign it, then demand the return of your goods.

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