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Contract Law News | September 2016

Terms of trade in the contract of sale

Where you provide goods and services of a substantial value to customers under a contract for sale containing terms of trade, ensure that you include the following terms:

  1. That you can demand a substantial deposit for part payment of the goods before the delivery
  2. That you can demand payment (or balance of payment) on delivery of the goods or services.
  3. That the customer provides you with a “security interest” in the goods being delivered. This is particularly useful if goods are not paid for on delivery and you wish to impose a “retention of title” over the goods until you receive payment for the goods. Therefore if your customer becomes insolvent and an external administrator takes possession of your goods (which have not been paid for) then you can claim re-possession of those goods.

At the time of sale

  • In order to ensure you have a “security interest” over the unpaid goods you must ensure you have followed the procedure for the perfection of that “security interest” over your goods under the Personal Property Securities Act (Cth) 2009.
  • If you are able to obtain the bank deposit details of your customer, it may be helpful in the event you need to enforce a court judgement against your customer.

Following up a court judgement

In the event that your customer does not pay for your goods and services then you may be able to commence legal proceedings against the customer and you may obtain a court judgement for the amount due to you. There are a number of options for its enforcement:

  • One of the more expedient ways of enforcing a judgement is to “garnish” the bank account of your customer, or to “garnish” the customer’s wages if the customer is employed. In order to garnish a bank account you must have the correct bank account details of the customer. It will be difficult to obtain these details once you have the court judgement – hence our recommendation above to obtain them at the time of sale.
  • The alternative forms of enforcing a judgement can be fraught with delays and expense, for example, executing an order for possession by a bailiff or sheriff; issuing a writ for goods to be auctioned; or seeking to wind up a company or bankrupt an individual. The last two options will not directly provide you with the payment you seek.
Forum Law Solicitors, in Sydney’s inner west suburb of Leichhardt, are experienced and well qualified to advise and assist you with pursuing payment for your goods and services and enforcing any court judgement you may obtain, no matter big or small your claim. Call us for a free 30-minute conversation on (02) 9560 3388 or in our friendly and professional office in Leichhardt where parking for clients is free.

Forum Law is an active member of several reputable law and industry associations. We have recently obtained ISO9001 accreditation.