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When selling products as part of your business, having comprehensive terms and conditions are an essential part of making sure that your business is operating correctly. Terms and conditions set out the rights and obligations of both you and your customers. By making sure you cover all of your bases in this document, you reduce the risk of legal consequences. As a provider of goods and services in your business, you have a responsibility to set fair and reasonable terms and conditions. You also need to have a good balance between the rights of both parties. This article will provide you with some key clauses that inform the customer on:

  • what products and services you are offering;
  • how they pay for it; and
  • what to do if they want to return or repair the product they purchased.

If your business is online, this article also covers what to include in a privacy clause.

Products You Provide

The first thing your terms and conditions need is a description of what you are providing for the customer. This means defining the product you are selling and how customers can access those products. Usually, this would include:

  • where the customer can see what products you have for sale;
  • how the customer can buy those products;
  • who is responsible for verifying the order – e.g. if the customer inputs the wrong details, who is responsible;
  • any requests the customer has made that is outside of what you recommend, that you have both agreed to – e.g. using cheaper paint for the product;
  • how you are sourcing your product, and availability – e.g. if you source the product after the order comes through, you should specify this; and
  • how the customer can track their order once completed.

Payment Terms

It is also important to include a clause outlining how payments function in your terms and conditions. This can include:

  • how customers pay you;
  • how you receive that payment;
  • what the payment consists of – e.g. how much is GST;
  • in what conditions you may or may not accept that payment;
  • that your customer agrees to pay the prices you have set; and
  • the currency you are operating with.

Extra Costs

There are costs that a customer may pay other than the payment itself. You would need clauses in your terms and conditions to cover these costs as well. These can include:

  • delivery costs – how much the customer has to pay, as well as your liability in the delivery period, and how long this period should take;
  • warranties – if the customer has paid for any extra warranties along with the product, you should have a clause outlining the time this warranty lasts for, as well as how much it is, and any implied warranties; and
  • supply costs – if you are using different materials or suppliers than you would normally use at the customer’s request, it would be good to outline any extra cost.

Intellectual Property

If the products you sell use any of your intellectual property, it may be a good idea to include a clause in your terms and conditions outlining:

  • the rights of the customer to use this property; and
  • your own rights in its ownership and distribution.

Returns and Exchanges Policy

NZ consumer law has different guarantees and protections for consumers, so it is important to be aware of these.

In New Zealand, customers have a right to request a return, exchange, or refund if the product you supply is faulty in any way. 

In your terms and conditions, you should specify how customers can request a return or a repairs process. You also have the right to investigate any claims of faulty products first. It is beneficial to outline this process in a clause in your terms and conditions.

Complaints Policy

You also have an obligation under NZ consumer law to avoid delay when listening to and dealing with customer complaints. So, it is useful to outline your complaint process in your terms and conditions to be completely transparent.

Privacy Policy

Many businesses now have an online presence. Often, this presence is how customers will find your business. If you do have an online element to your business, it is a good idea to include a privacy policy as part of your terms and conditions. 

For example, an online presence might include if customers place their orders through your website.

Your privacy policy should include:

  • what information you are gathering from your customers;
  • how you will use this information, e.g. for advertising purposes;
  • if you store customer information and how long for;
  • how you protect customer information;
  • if and how you share customer information;
  • how customers can view their personal information, and correct it; and
  • how they can contact you with a privacy question or complaint.

Key Takeaways

Having robust terms and conditions can make sure that your business is fully covered in fulfilling your obligations as a seller. It is an essential legal document that informs the customer on what you are offering and what their responsibilities are in the transactional process. If you want more information, or help drafting your sales terms and conditions, contact LegalVision’s contract lawyers on 0800 005 570 or fill out the form on this page.

FAQs

What do terms and conditions include?

A sales terms and conditions agreement is a document that sets out the terms that your customer agrees to when they purchase a product or service from you. This can include the payments process, a privacy policy, and how deliveries are made.

Are terms and conditions necessary?

Terms and conditions are not necessarily required by law. But, most businesses have them, because they limit your liability if anything goes wrong in the transaction and protect your rights as a business.

Are terms and conditions binding?

When the customer agrees to your terms and conditions, and goes through with the transaction, then they are binding. This means that any limited liability clauses you have in your terms and conditions will apply, as long as they are fair and reasonable.

Should I write up my own terms and conditions?

If you want terms and conditions that apply to your specific business context, it is a good idea to tailor them to your needs. If you need help deciding what you need to cover your liabilities in your transactions with customers, you can get legal advice on the topic.

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