Often businesses treat their terms and conditions as a “set and forget” obligation. They are prepared early on in the life of the business (or after the first time the business has a problem getting paid) and not updated again. It may have been quite some time since you actually sat down and read your terms and conditions.
Recently we had a client who wanted to retrieve some goods they had supplied to a customer who had become insolvent. The customer had signed our client’s terms and conditions. The terms and conditions had been drafted in 2007 and had not been updated since then. There was a retention of title clause but no reference to the PPSR. Our client admitted that he had not looked over the terms and conditions since they had been first drafted. The terms and had not been updated to reflect the changes introduced under the Personal Property Securities Act in 2009.
Our client had not registered its interest in the property on the Personal Property Securities Register and did not even have the right to do so under his terms and conditions. Our client lost priority to all the registered creditors and lost his property. An expensive mistake.
Our client had also not addressed privacy requirements or identification requirements of parties signing for customers or in giving personal guarantees.
Your terms and conditions are meant to protect your business.
You should read through your terms and conditions and make sure they are still up to date. Some ‘red flags’ that you might need to update your business’ terms and conditions include:
• No references to the Personal Property Securities Act or Personal Property Securities Register (particularly where you supply goods on credit); or
• References to the Trade Practices Act (replaced by the Australian Consumer Law in 2010); or
• No privacy provisions; or
• No means of identifying the party signing or that they have authority to sign for a company.
There are other changes to the law that are not mentioned above and some planned changes (particularly in the area of privacy). If you believe your terms and conditions may be out of date, or they have not been reviewed in a while, you should get them checked as soon as possible.
How Watkins Tapsell can help
If you are concerned that your business does not have adequate protection or you have a current concern regarding issues in the workplace, please contact our Commercial Property and Business Team. .