One of our existing clients, a furniture maker, faced problems with the way in which payments for his furniture was made. Our client had no written contracts but agreed orally with all of his customers to take a deposit of 10% for the goods and for the balance to be paid once the goods were delivered.
Many customers would comply, however a number would pay a deposit in advance, but once the goods were delivered, they would leave it months before they finally settled the bill. Our client would be left out of pocket, having given up rights to the goods as well as having to chase for payment. As you well know, time is money. We were asked to help deal with the issue.
The ideal solution would have been to obtain full payment in advance but this was not workable from the client’s point of view and would lose him business. We therefore put in place a set of terms and conditions with clear payment terms and additional benefits such as charging interest and making sure the ownership of the goods only passed upon full payment being made. We also added further protection by reviewing the client’s current insurance policy and limiting his liability to the maximum amount covered under his insurance.
Other important clauses to consider in written terms of business are jurisdiction when dealing with cross border imports for example, how and when you can terminate your relationship in the event things don’t go according to plan and the scope of your services to prevent any dispute on what was promised as against what was delivered.
If you do not have written terms of business or want to take the opportunity to have your current ones reviewed do take advantage of our Terms & Conditions current offer. Please see the bottom of this newsletter for more details or feel free to contact us with any questions on 0207 440 2540 or email us at firstname.lastname@example.org.