Stephen Robertson’s Post

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Legal Practitioner Director at SJR Commercial Law

What are the 'nice to have' elements to consider for your trading terms? [Trading terms series - article #3] Yesterday I dealt with the 'must have' elements - but there are lots of other useful things to consider for your trading terms: * Product-specific terms. Some of your products / services may not follow the 'standard' rules. For example - you may supply most products on an order-by-order basis, but require a minimum volume (or term commitment) for certain products. You could have a whole set of new terms for those specific products, if that suits your business process - but it might be more efficient to enable specific Product Terms from within your main terms, then supply a 'here's what's different for this product' booklet. * PPS all assets. As well as the PMSI (mentioned in article #2), consider including a right to register an all assets PPS interest – if you want that right, then establish it in the trading terms (or credit application). Should you seek this and should you actually register it? This will depend on your customer profiles, your level of exposure to customers, the level of alternate security you have obtained etc. * Update process - it can be painful and time-consuming to update your trading terms with all of your customers, and that can deter businesses from doing it - even when they really need to. You can make the update process easier, by adding a more sensible and flexible process in your trading terms. * Retention of intellectual property rights - where this is appropriate because you need to re-use the work you've done. You do need to watch how you handle this issue, because you can easily end up with an unfair contract term here (see article #4 tomorrow). * Timeframes for delivery (and guidelines about when they will change, or not apply). Great for managing expectations. * Rates for ad hoc (casual) supply. How do you get paid for extra work, which you didn't quote for? A bit of careful design in your trading terms can cover this issue neatly. * Packaging (especially container / pallet) cost-recovery mechanisms. * 'Hands off' provisions for your staff. You will naturally put your staff in positions where they will form strong relationships with customers - consider protecting your investment in your staff, when that is appropriate for your industry and culture. * an ability to respond to increased credit risk (this may go into the credit application instead) -- possibly including extra powers. * details of voluntary warranties (these are often published separately, but you need to at least consider how well they integrate and where there are inconsistencies). This week, I'm writing all about trading terms, to help get business owners on the right track - to explore what trading terms are for, how to make them work, what to include, and what to leave out. Tomorrow it's time for: "what should you leave out"? #tradingterms #commerciallaw #QldLaw

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