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Terms and conditions are a non-negotiable requirement for commercial businesses – but what do you put in them?

Your terms and conditions outline the rules of engagement between your business and your clients. Just like the rule book in the game Monopoly, they outline what needs to happen if and when one of the players (or parties) performs a certain action (or fails to perform that action). They are the rules of engagement that everyone needs to follow when going into business together, so that the “game” can be played in a manner that is fair and doesn’t catch anyone by surprise if something goes wrong.

T&Cs are the bedrock that all contracts should be built upon, but a lot of businesses struggle with what information to put in them, or how to use them effectively to safeguard themselves. We have seen countless examples of businesses who have Google-d or copied-and-pasted their terms and conditions from somewhere else, without recognising that some details were out of date or simply weren’t appropriate for their style of business.  We are sharing 7 must-have clauses that companies should include in their T&Cs to help with payment recovery – so that there’ll be no fear the next time you pick up a chance card.

Payment Times / Default Triggers / Cost Recovery and Interest

Payment terms need to be crystal clear for all parties to understand. Do you require cash on delivery or order (especially if a client is outside of your payment terms)? Do you require a deposit? When do you require payment? 30 days? 60 days? Whatever payment time you decide on, they need to be clearly set out in your T&Cs.

Obvious default trigger events that should be included in all T&Cs are that if a company fails to pay any tax invoice on time or a Court Judgment is entered against them, you may immediately recover all monies outstanding, even if some amounts are currently not due.

Cost recovery and interest clauses are a great line of defence between you and your debtors. For example, there should be a clause in your T&Cs that allows your company to pass any costs you’ve had to incur on debt recovery and/or legal costs onto the customer. Afterall, it’s not your company’s fault that your customer has been slow to pay, so why should you have to pay for their breach of contract?

Force Majeure

Force majeure is a legal term that is defined as “an unforeseeable circumstance that prevents someone from fulfilling a contract”. A force majeure clause should be added into every contract to free all parties from liability should an extraordinary circumstance occur that no one has any control over.

Such events may be a natural disaster, crime, a strike, or – as has become relevant in the past two years – a global pandemic. A force majeure clause will protect all parties from penalty should the unexpected become a reality, and as such, is a necessary addition in all T&Cs.


The jurisdiction you include in your T&Cs will determine which state laws apply to your terms and conditions, as well as where any necessary court action may be commenced. This means that if you are a Queensland based business that does business in Queensland, your jurisdiction should be Queensland – not Australia or Brisbane.


A carefully worded privacy clause and/or privacy policy will ensure prospective clients or customers understand that you may conduct credit checks and list payment defaults if payment is not made. It should also outline how you  will collect, store, and disclose any personal information.


Security can be sought by way of  a personal guarantee from Directors of the Company,  a charging clause allowing you recourse to any real property owned by your customer or client in the event or default, or retention of title and appropriate protection under the Personal Property Securities Act 2009 (Cth) (PPSA)

Dispute Resolution

A dispute resolution clause outlines a list of steps the parties may take should a dispute arise between the parties. The point of a dispute resolution clause is to provide a procedure for the parties to follow before an issue escalates too far. The addition of a dispute resolution clause can mitigate the need for parties to commence  legal action, which will save all parties a lot of time, money, and energy in the short and long term.

Limited Liability

A limited liability clause can protect parties from financial liability if they breach the agreement and is based on the understanding that parties can only be liable for loss or damage that is reasonably foreseeable.

Get in Touch

If you need help creating bullet-proof terms and conditions that will ensure your company is protected from situations of unpaid debt, then contact the debt recovery experts today on 07 3166 8888.