Q: When writing up a customer contract, what things should I include to protect myself?
Aug 18 2009
Answered by: Clive Lewis Ask a question
Well-written sales contracts are essential to any small business that deals in products and services. The sales contract is an agreement that specifies the rights and obligations of both the seller and buyer.
Businesses need to tailor their sales contracts to suit the specific needs of their type of business. Often, the agreement is printed on the back of the invoice or bill of sale. For those customers who pay for an item when they buy it, they automatically accept the terms of the sale at the point of purchase.
When drawing up a sales contract for your business, you need to have it reflect the particular aspects of your business, including types of products and services as well as price and payment terms. You can also make the contract more favourable to you as the seller. The following are general terms and conditions that you can include in your sales contract:
- Identification of the contracting parties: identifies who is the seller and who is the buyer
- Description of goods and/or services: Describes what specifically is being bought and sold
- Price and payment terms: Gives the price of goods and/or services, including taxes, and finance charges.
- Buyer and seller's rights and obligations: this includes any representations and warranties.
- Liability limitations: sellers try to limit their liability to the purchase price (include a clause that states that you are not responsible for lost profits or damages caused by malfunctions)
Getting the terms and conditions (T&Cs) right is the best protection you can get. Look at the T & Cs of businesses providing similar products or services. It may be wise to consult a lawyer or a chartered accountant as ill-defined T & Cs can cost considerable sums of money if they are not appropriate to the circumstances of the contract.
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