Boston Commercial Services Pty Ltd (ABN 87 114 658 070) CAPI Licence Number 409 456 759

You are here: Home / News / Your Credit application Terms and Conditions Should be Drafted by A Legal Expert

Your Credit application Terms and Conditions Should be Drafted by A Legal Expert

If your business allows clients to purchase products or services now and pay for them later, you are essentially extending them credit, assuming they have the means to pay for the transaction. While this can help to facilitate business, it does leave you wide open to the risk of serious financial loss. For this reason, it is vital that you establish bulletproof terms of sale prior to extending credit to any client.

The terms and conditions in your credit application, together with those appearing on invoices, order forms and your website may all form part of the contractual agreement between you and a customer. It is these terms which will ultimately determine your rights in the event that your client does not, or cannot pay. They must therefore be drafted to create appropriate rights to protect your interests and handled in such a way that they are enforceable.


Why Do I Need a Lawyer to Draft My Credit Terms?

There are a number of ways a lawyer can assist you to maximise the protection conferred by your terms and conditions, ensure they are enforceable and greatly reduce your financial risk of trading on credit.


A lawyer can help you establish appropriate screening policies for approving credit

Credit can’t be handed out to just anyone. It is vital to put safeguards in place to mitigate financial risk. But how do you decide which clients to extend credit to? Which clients are financially viable? What questions should you ask credit applicants? And what information can you require them to provide?

A lawyer can provide you with a professionally prepared credit application form which collects all the necessary information to assess an applicant’s financial position and clear policies for accepting or rejecting an application.


A lawyer can ensure the enforceability of your terms and conditions

For a specific term to be enforceable, it must form part of a binding contract between the parties. Businesses often assume that once there is a signature on a document a party is bound by it however this is not always the case.

Proper legal advice can equip a business to understand when and how legally binding contracts are formed using its specific credit and sales documentation, and to ensure that all terms of sale are enforceable.


A lawyer can draft terms and conditions that create security interests to protect you if your client becomes insolvent

Clauses creating a security interest in personal property such as a retention of title clause can ensure that if a client cannot pay, you can seize or sell certain assets.  Such securities not only provide a means of recovering your loss, but they can place you in a preferential position to other creditors in the event a client becomes insolvent.


A lawyer can ensure statutory and regulatory requirements are met to validate security interests

Many businesses are unaware of the statutory requirements and registration procedures that apply to security interests. Failure to comply with registration procedures impairs your rights to enforce a security. It is vital that businesses obtain reliable legal advice to ensure that all securities will be enforced by a court if necessary.


Take home point

The investment in professionally drafted sales and credit documents is an investment in financial protection and peace of mind and is the prudent option for all businesses.

If you would like to reduce your financial risk, talk to an expert about how we can bolster and streamline your credit and sales documentation. If you want a debt collection or debt recovery service in Sydney, Melbourne or Brisbane, you can call us 1300 668 699.


Read More:


Get In Touch

Get an obligation free assessment now


Get in touch with us

Talk to our experts in Debt Recovery, Legal Services and Finance Solutions

admin 2:02 am
  • I have worked closely with Boston Commercial Services for over twenty years across four different companies and would not work with anyone else in regards to helping me with my outstanding accounts. Whenever I have started a new role, the first thing I am asked is, “How would you go about cleaning up our accounts receivable ledger?” My answer is always the same – “The first thing we need to do is call Boston Commercial Services”.

    Voytek Bradford

    Freedom Foods Group Limited (National Credit Manager)

  • I have known the principal of the BOSTON Group (Derryn HARRISON) as well as key staff members (including Ben GOWER) for well over 2 decades and have been using their professional services for myself as well as for Powerhouse Logistics Pty. Ltd. on a regular basis, not only in Sydney but on a national basis.

    At all times BOSTON have been extremely pro-active, attentive, courteous and professional with all matters we threw at them. Their advice has always been extremely sound and commercial and I find them to be a "breath of fresh air" within the legal fraternity and have no hesitation whatsoever to highly recommend them.

    Peter Brueckner

    Powerhouse Logistics Pty Ltd (CEO)

  • Expect A Star has worked with The Boston Group for 10 years. In this time we have appreciated the ongoing support of Boston for all of our collection and legal requirements. Like most businesses cashflow is critical to ongoing success and growth, with Boston we have found a partner who are an extension of our business and play a key part in our cashflow management. The Boston Group bring a level of expertise to our business which is valuable and coupled with their excellent customer service we look forward to continuing to work with them for many years to come.

    Ryan Meldrum

    Former CEO

  • I have been using the services of The Boston Group and their legal entity for over 11 years. During this time I have found their service to be impeccable, delivered with the utmost professionalism and integrity. The vast majority of cases that I have placed with Boston were far from straightforward, requiring legal acumen and delicate handling. Having used all methods available without success to procure payment, I confidently placed these matters into their safe hands. In all instances a successful outcome was achieved.

    Mark Parish

    Credit Manager

  • SNP Security has had the pleasure of working with Boston Commercial Services for the past 11 years. Boston has played an integral part in the continuing success of SNP Security’s low DSO’s, 90 Day % Debt & of course Bad Debts Written Off.

    Amanda Griffiths

    National Administration Manager

Boston Commercial Services prides itself in offering specialised, professional services, through a highly experienced team of debt collector, with personalised client attention.