Terms Of Trade Checklist
Your terms of trade are the contract behind every sale on credit — a quick checklist ensures the clauses that actually protect you on payment, interest and recovery are present and enforceable.
What's included
- A checklist of the clauses every set of trade terms should contain
- The payment, interest and recovery-cost clauses that matter most
- Retention of title and PPSR pointers
- How to get terms accepted so they bind the customer
7 min read
Why terms of trade decide recoveries
When an account goes bad, the first thing a recovery agent or lawyer asks for is your terms of trade. They determine whether you can charge interest, recover collection costs, retain title to unpaid goods and enforce a guarantee. Weak or unsigned terms cap what you can claim back.
You do not need pages of legalese. You need the right clauses, drafted clearly, and accepted by the customer before the first order. Use the checklist below to pressure-test what you have.
The terms of trade checklist
Tick each clause your terms already cover; flag the gaps for your lawyer.
- Parties and the exact legal entity supplying the goods/services
- Payment terms (e.g. strictly 30 days from invoice date) stated unambiguously
- Interest on overdue amounts — rate and how it accrues
- Recovery of collection and legal costs on default
- Retention of title until goods are paid for in full
- A PPSA/PPSR clause and consent to register a security interest
- Right to suspend supply or place the account on stop
- Dispute/claims window (time limit to raise invoice disputes)
- Personal guarantee or director's guarantee provision
- Set-off and application-of-payments clause
- Governing law and jurisdiction (your home state)
- How variations to the terms are made and notified
- A signature/acceptance mechanism that binds the customer
How to use it
Run your current terms against the list and mark each item present, weak or missing. Anything weak or missing goes to your lawyer to draft. Then make sure terms are accepted up front — bundle them with your credit application form so the customer signs to both at once.
If an account still defaults despite solid terms, those clauses are exactly what makes recovery efficient — refer the debt with your signed terms attached and the interest and cost clauses do their work.
This is general business information, not legal advice. Terms of trade should be drafted or reviewed by a qualified lawyer for your industry and state.
Tips
- Interest, recovery-cost and retention-of-title clauses are the ones that pay off later.
- Unsigned terms are far weaker than accepted terms — capture acceptance up front.
- Add a PPSR clause and register if you supply goods on credit.
- Set governing law to your home state to avoid arguing jurisdiction.
FAQ
Can I charge interest on overdue invoices?
Only if your terms expressly allow it and the customer accepted them. Without that clause, recovering interest is difficult.
Do I really need retention of title?
If you sell physical goods on credit, yes — it lets you reclaim unpaid stock, which can be the difference between recovering something and nothing in an insolvency.
Are terms valid if the customer never signed?
They are far more enforceable when accepted in writing. Get acceptance on the application form or by signed terms before the first order.
Templates are a head start — not legal advice
Customise to your business and have important documents reviewed. Need to recover a debt? We can help.