Terms of Trade
Terms of trade are the seller's conditions for the sale of goods or the provision of services to the buyer of the goods and the receipt of those goods and services. The most common experience with these is payment on delivery, for example, payment for goods at the supermarket or convenience store or payment for services provided by a dentist or a plumber. There are other terms or conditions which apply in more complex transactions, some of which are:
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Representation - A representation can be any form of advice, recommendation, information, assistance or service given by the seller in relation to the goods. Most often the seller may have a condition of sale that whatever the seller may have said or done in relation to the goods cannot be relied on and the buyer should rely on there enquiries before purchasing goods. Whether or not the seller can rely on such a condition will depend on the circumstances surrounding the representation.
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Sale by description and conformity with description - Particularly for sale of goods in bulk or large quantity, the buyer examines the sample first before placing orders. Sale by description occurs where the goods may not be in existence. It is an implied condition of sale that the goods will confirm with the description.
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Conditions or Warranties - A condition is a provision in the contract, breach of which will allow the buyer to bring the contract to an end and reject the goods. If the provision is a warranty, then the buyer can only sue for damages. Predominantly, goods of technical nature, such as household equipment and computers, come with the manufacturers' warranty as to defect. Whether a provision in the contract is a condition or warranty will depend on the construction of the contract.
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Implied terms - Implied terms are those conditions that do not appear in a contract but are implied by law or industry practice. Some common implied terms are: that the seller owns the goods being sold or has a right to sell the goods; that the goods being sold are fit for purpose; and that the goods are of merchantable quality.
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Delivery and Instalment deliveries - A contract may stipulate when, how and where the goods are to be delivered. Sometimes the seller may have a condition that any delay on its part will not entitle the buyer to sue for damages or cancel the order.
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Acceptance of goods - Upon delivery, the buyer is to have inspected the goods and accepted them. The seller, as a condition of sale, may wish to absolve itself from any liability once the goods are delivered.
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Risk - Risk is any peril associated with the goods such as the risk of loss or risk of damage. It is a usual term of the contract that the risk in goods passes to the buyer upon delivery.
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Retention of title - The seller may wish to retain title in the goods if the buyer fails to make payment for the goods. The title to the goods will not pass to the buyer upon delivery. Upon bankruptcy or liquidation of the buyer, the seller may be able to repossess the goods from the receiver or liquidator and not wait in line with other creditors for payment after disposal of the buyer's assets
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Stipulation as to time of payment - Whilst most sellers would prefer prepayment or payment upon delivery, in business, credit is sometimes allowed to the buyer to pay for the goods after, say 30 days or 60 days. Some sellers may charge interest on overdue accounts.
There are various federal and state laws governing the provisions of goods and service. A seller may not be able to opt out of its certain statutory obligations.
Sellers should have their existing contracts reviewed or have certain standard terms of trade drafted by the solicitor. Buyers may wish to have such contracts reviewed by their solicitor before executing them. For assistance, please contact LAC Lawyers Pty Ltd.
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Terms of Trade Articles
Business & Commercial Law - How To Improve Your Cash Flow and Statutory Demand
Date: October 05, 2007
Author(s): LAC Lawyers
Credit is an integral part of commerce, sometimes for the better and at other times for the worse. To improve your cash flow and to ensure that credit is being given to debtors who are credit worthy, a comprehensive credit application should be completed at the inception. From the information in the credit application referred to below you are likely to be in a better position to recover any debts.
Business and Commercial Law - Do’s and Don’ts for Small Businesses
Date: September 24, 2005
Author(s): LAC Lawyers
Starting a new business can be a daunting operation. A remarkably high percentage of small businesses fail within the first five years of operation. Sometimes that is because the business itself is not sound. However, on other occasions the problem lies in a lack of planning or an ignorance of the many legal requirements that must be met by the small business operator.
Business Law - Personal Guarantees & Indemnity
Date: August 04, 2009
Author(s): LAC Lawyers
If you are a supplier of goods and operate your business on a credit system then it pays to protect your position in relation to your debtors. The following scenario depicts a common occurrence in the supplier/purchaser market leading to frustration and ultimately loss of moneys owning.
Consumer Protection - Contract Review Act
Date: May 21, 2009
Author(s): LAC Lawyers
Often times consumers enter into contracts where the terms are not negotiable and are expected to just sign the bottom of the page and be on their merry way. Some of these contracts include mobile phone contracts, car hire contracts, pay television contracts, finance agreements, and even those little car parking tickets issued by the machines when you go into a shopping centre or car parking station.
Employment Law - Restraints Of Trade: Restraining Former Employees When The Work Agreement Has Ended
Date: August 14, 2009
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
Employment restraints are contractual terms which seek to limit the activities of the employee once their period of service ends.
What to expect when you call LAC Lawyers
Date: December 13, 2006
Author(s): LAC Lawyers
LAC Lawyers is a full service firm dedicated to the provision of superior legal services in Australia. Our aim is to provide unrivalled client satisfaction coupled with high quality service and advice. When you call LAC Lawyers our friendly reception staff will spend time with you to identify the area of law your enquiry relates to then pass you on to one of our qualified solicitor's who can help you.