There are many ways you can grow your business including moving offices like Havilah Legal are doing this week! A simple way to impact on your cash flow is to re-evaluate your agreements with your customers.

The seemingly perfect agreement between a customer and a business can turn out to be a bad fit. Simply reviewing your existing Terms of Trade can potentially lead to an increase in cash flow and productivity within the business.

• How good are your arrangements?
• Is the agreement with your customer in writing?
• Do you have your customer’s full details?
• Are your terms of payment included?
• Is the agreement signed or acknowledged before you do the job or deliver the goods?
• Can you charge interest for outstanding accounts?
• Do your Terms of Trade allow you to recover solicitors’ fees to recover outstanding accounts?
• Is a Director personally responsible if you are dealing with a company?
• Is there a retention of title clause allowing you to get your goods back if a customer does not pay?
• Have you included a charging or a caveat clause over the property of the customer?
• Do your Terms of Trade lawfully include/exclude warranties and liabilities?

Certain terms will be implied into your Terms of Trade by various state and federal legislation. The key federal legislation is the Trade Practices Act 1974 (Cth) (TPA) which automatically implies warranties and conditions into contracts for the supply of goods and services to a “consumer” by a corporation. In WA, relevant state legislation includes the Fair Trading Act and the Sale of Goods Act.

For instance, goods must be of merchantable quality and fit for the purpose they were purchased with some specific exceptions.

Check with your lawyer whether these warranties will be implied into your Terms of Trade and whether you can lawfully exclude them, otherwise:

1. the exclusion will have no legal effect; and
2. the attempt to exclude the implied warranties may expose you to prosecution for an offence against the TPA or related legislation.

Now may be a good time for you to review the terms of trade particularly to make sure any exclusion and limitation clauses and disclaimers do not contravene the TPA and land you in hot water!

Related Havilah Legal service(s): Commercial Litigation