We regularly come across sole traders and small to medium businesses who are operating at greater risk than they realise because they do not have terms and conditions in place, or what they do have is inadequate.
A businesses Terms & Conditions (sometimes called Terms of Trade) set out the practical arrangements for doing business with you. They help you communicate expectations clearly up front, and protect your interests if things go ‘pear-shaped’ with a customer, client or subcontractor down the track.
Without Terms & Conditions, disputes often take longer and cost more to resolve, especially if you need to pursue legal avenues. For example, if a customer refuses to pay, you may not be able to charge interest on the overdue amount, keep their deposit until they pay, or recover your debt recovery and legal costs.
Key protections you need
We recommend you include four core protection clauses as a minimum.
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Payment terms (goods and services):
These outline timeframes and payment methods, and what happens if a customer pays late. They can also include your right to pause work until overdue amounts are paid, and to charge interest on outstanding invoices. -
Confidentiality and intellectual property:
These set expectations about what information must be kept confidential and how your IP can (and can’t) be used. They can prevent a customer or client from using your designs, documents, systems or other materials without permission, or sharing confidential information with others -
Delivery terms:
These clarify who pays delivery costs, who is responsible if goods are lost or damaged in transit, and when ownership passes to the customer (for example, on delivery or once payment is received) -
Force majeure:
These explain what happens if you can’t meet your obligations due to events outside your control, such as natural disasters or government directions (as many businesses experienced during COVID).
Other helpful advice
The biggest issue we see is vague wording. Clear, plain terms with specific requirements and timeframes reduce confusion, delays and non-payment, and lower the risk of disputes.
You also need to make customers aware of your Terms & Conditions and give them a fair chance to review them. You don’t always need a signature, but where practical it’s best practice because it helps prevent later arguments about what the customer saw and agreed to.
Finally, AI can help with structure and readability, but see it as a starting point. Make sure the terms match how you actually trade, remove anything you don’t understand, and ask a lawyer to review the final version. If a dispute escalates, a court will refer to your Terms & Conditions to work out each party’s rights and obligations.
If you would like to prepare or review your terms and conditions, our dedicated commercial team at LRB Legal can help.
This information was originally published in the February 2026 edition of the Fleurieu Sun. Information is general in nature and does not constitute legal advice.