Using terms and conditions to manage exposure to creditors
Why should I use terms and conditions as a buyer?
In the same way that you should use a comprehensive set of terms and conditions when offering trade credit or selling goods or services in order to protect your business, it’s similarly in your best interests to enforce your own Ts & Cs as a purchaser. Clearly stating exactly what you expect right from the start can go a long way towards avoiding any disagreements further down the line, and putting your intentions in writing provides you with a basis for resolving any disputes which may crop up. It’s always better to agree to specific terms before embarking on any type of business relationship, whether you are buying or selling.
What sort of terms and conditions should I use as a purchaser?
Your Ts and Cs should provide you with a comprehensive set of protections as the buyer, carefully regulating your business relationship with the seller, safeguarding your interests while setting out the obligations of both parties. There are various matters which can be covered, including product or service specification, price, payment, delivery and expected quality, as well as rights of return or refund. As a business, you do not have the same level of automatic legal protections as a standard consumer, which is why you need to ensure that you consider any possible risks and aim to eliminate or minimise these through watertight contracts.
What else can be done to protect my interests as a business buyer?
Many businesses choose to use Purchase Orders in addition to Terms and Conditions. Purchase Orders essentially set out many of the basic elements of any agreement to buy goods or services, including quantities, prices and any available discounts. This can bolster your agreements and further secure your business purchasing activities. In the event that a seller later defaults on any agreed term, having records to hand which can be easily sent to them as an attachment (e.g. as a Word document in an email) can help you to persuade them to correct their mistake or accept your demands. These types of documents are also extremely useful in the event that a dispute ends up going to court.
A variety of documents which may help with reducing creditor exposure by using terms and conditions can be downloaded from our Business Documents Folder.