The purpose of this subtopic is to provide guidance on the use of the supplied Terms of Trade precedent.

There are several issues that need to be considered when using supply agreements. If the terms of the agreement are not signed by the customer, for example where terms are set out on the reverse side of an invoice, it is critical that the terms are drawn to the attention of the customer before the goods or services are supplied.

Care must be taken to ensure compliance with the Australian Consumer Law (ACL), (which is contained in Sch 2 to the Competition and Consumer Act 2010 (Cth)) Under the ACL, consumers in all states and territories have the same protections, and businesses have the same obligations and responsibilities. Among other things, the ACL contains requirements relating to consumer guarantees and unfair contract terms.

Care must also be taken to ensure compliance with, where relevant, the Personal Property Securities Act 2009 (Cth) (PPSA) and other legislation. In terms of the PPSA, the legislation creates a comprehensive national regime for personal property securities. With the exception of certain limited categories of assets such as water rights, all forms of security interests over personal property is governed by the new regime. Under terms of trade, a key security interest is retention of title clauses to secure payment. A retention of title clause, often referred to as a RoT clause, generally provides that supplier has title to the relevant goods (such as equipment) until the customer pays the purchase price, and that the supplier can repossess unpaid goods in some circumstances, such as where the customer becomes insolvent.

See Supply agreements.