Updated: Dec 15, 2020
Before you start working on a job, it pays to provide customers with your terms of trade. That way, they know what to expect from the beginning. Not only will well-drafted terms of trade help minimise disputes and limit your liability, but they will set expectations for the scope of your services and payment.
Let us break it down further.
What exactly are terms of trade?
When someone engages your services, terms of trade are the terms and conditions you and your customer agree to before you commence work. They typically outline the rights and responsibilities of each party and the scope of work to be completed.
When do I need terms of trade?
If you are a service provider, then you should have written terms of trade tailored to suit your business and the services you provide. Terms of trade will help reduce the risk of disputes and limit your liability through a transparent set of terms and conditions.
How do I use terms of trade?
If you are a tradie, you likely already provide a quote to your customers before you start a job. They agree to the price and work commences. Sound familiar?
Adding in a terms of trade document will not alter this process. The terms of trade will simply be attached to your quote, outlining the terms and conditions of your services in more detail. By accepting your quote, the customer is also agreeing to your terms of trade.
What should I include in my terms of trade?
Every trade is different and when terms of trade are drafted by a lawyer, they are tailored specifically for your business. Typically, key terms often include the following:
Scope of work // Make sure you clearly articulate in writing the scope of work you will be carrying out.
Payment // Include payment terms, including when the customer will receive an invoice/s and how long they have to make payment. In this section, consider the types of payment accepted and what the repercussions will be if payment is not made on time. Will you stop performing your services? Will you engage debt collectors or take legal action? Make sure these details are included.
Termination // Include details about what will happen if one party wishes to terminate the contract. Make considerations from both perspectives. Such as, the customer may wish to terminate the contract if you are not onsite on time and if the customer is not paying your invoices, you may opt to terminate.
Liability // Make sure you include clauses to limit your liability. Think about events outside of your control and delays, and the costs associated with these.
Terms // Include information about the term of the contract. Do the terms of trade apply from the date of agreement and is there a set period for the job?
You may wish to include other information in your terms of trade, such as warranties and defects. Make sure you consider your obligations under the law and that any wording set out in your terms of trade complies. For example, if you are a tradie in Queensland, information needs to align with the rules and regulations of the Queensland Building and Construction Commission (QBCC)
If in doubt, ask a lawyer
If you need help putting together a tailored terms of trade template for your business, talk with a professional. Here at Jensen & Co Lawyers, we offer flexible services at competitive rates. Get in touch with our team for a confidential discussion.