Informing them about the conditions they are doing business enables them to back out if they do not agree to the terms.
Written terms of sale and delivery are not statutory, but it is advisable to work out such documentation in order to minimise the risk of problems and disputes.
It is advisable to adjust your terms of sale and delivery to comply with trade customs and general legislation.
Terms of sales and delivery can be mailed out along with promotion material, but a customer must, at the latest, be informed of such terms when the agreement is made and they must be included in the agreement.
Pre-printed terms of sales and delivery on the back of the invoice is not adequate. This is just a subsequent arrangement in order to secure payment for work carried out or goods delivered.
Thus, terms of sales and delivery must be stated on estimates and quotations. On the front page of the quotations it could refer to the back or enclosures for such information.
The burden of proving that terms of sales and delivery was part of the agreement lies with the seller. Thus, it is crucial to obtain the customer’s confirmation of the existence of such terms.
A sales pattern could be that the customer receives an estimate of a given assignment. An estimate is a rough specification and maybe a price calculation.
It must appear from the estimate that it is only an estimate. It is important that the customer knows that what s/he has received is an estimate, as estimates are not binding.
If the customer finds the estimate attractive, s/he may request a quotation.
Making a quotation is binding to the offerer for a specified period. Specification of period may appear from the quotation.
Alternatively, trade customs may stipulate that quotations are binding for a specific period. Otherwise, the period is the time the offerer of the quotation estimates as being appropriate for the customer to consider the quotation and respond to it.
To be sure that your deal is home and dry you need to have your customer return a specified and signed order confirmation – and, if required, a signed copy of the terms of sale and delivery.
Luck favors the one who is well prepared.
- Søren Hougaard, Danish professor in Entrepreneurship