Terms of trade is a contractual agreement that is legally binding that sets out and/or limits liabilities and obligations of you and the client/customer. This is important because it sufficiently and succinctly sets out issues relating to product delivery, payment terms, data protection, warranties and guarantees, copyright, acceptable use, defects and returns etc.
Other benefits of a terms of trade agreement include:
- Essentially protects your business and seeks to minimise disputes and problems as both parties know where they stand by reference to the agreed terms of trade.
- Enables you set out terms that are favourable to clients – terms that provide equal bargaining power and promote business efficacy, whilst containing the appropriate protection for your business.
- Terms of Trade are evidence that can be produced should a dispute arise.
- Helps you and your clients/customers understand their obligations, rights, roles and responsibilities.
- Failing to have terms of trade can have serious effects on the cash flow of your business – knowing when a client/customer will pay for goods and/or services promotes efficient and transparent accounting.
