Preorder Terms For Made-To-Order Furniture

Yes, if you take deposits before you start making furniture, you should have clear preorder terms and conditions in place for your New Zealand customers.

The more nuanced part is that your terms can't simply say the customer has no rights once they pay. Made-to-order furniture can involve long lead times, imported materials, workshop delays and customer changes, but the Consumer Guarantees Act 1993 and Fair Trading Act 1986 still apply.

Good preorder terms help you set expectations from the start. They also give you a fair process for deposits, cancellations, variations, delivery, delays and refunds, so you're not trying to solve a tricky situation after timber has already been ordered or production has started.

Do You Need Preorder Terms And Conditions In NZ?

Yes, you should use written preorder terms if you take payment before the furniture is ready to deliver. This is especially true if each item is made to order, customised, imported, upholstered, stained, measured or built to the customer's specifications.

Preorders create a gap between payment and delivery. During that gap, plenty can happen:

• materials may be delayed or discontinued
• your workshop schedule may change
• the customer may ask to change the size, finish or fabric
• delivery access may be harder than expected
• the customer may want to cancel before production is complete

Without written terms, you may struggle to show what the customer agreed to. For example, if your website said an item usually takes 8 to 10 weeks but your invoice said nothing about lead times, a customer may argue they were promised delivery by a specific date.

Your preorder terms and conditions in NZ should sit with your broader customer contract somewhere your customer can actually read and accept them. Depending on how you sell, that might be:

• on your website checkout page with a tick box and clear website terms and conditions
• attached to your quote or invoice
• included in your order confirmation email
• signed digitally before you accept the deposit

For higher value custom pieces, a signed order form is often worth it. Templates can be useful as a starting point, but made-to-order furniture terms work best when they match how your business really operates.

Can You Take A Non-Refundable Deposit For Custom Furniture?

Yes, you can usually take a deposit for custom furniture, but you need to be careful about calling it completely non-refundable. A deposit clause in your business terms and conditions can't take away a customer's rights under the Consumer Guarantees Act 1993 or the Fair Trading Act 1986.

A deposit is useful because it helps you cover upfront costs such as materials, design time, supplier orders and production scheduling. It also gives you some protection if the customer changes their mind after you've started work.

Your custom furniture deposit policy should clearly state:

• the deposit amount or percentage
• when the deposit is due
• when production will start
• what costs the deposit is intended to cover
• whether the deposit is refundable if the customer cancels, subject to any statutory cancellation rights
• what happens if you can't supply the item

For example, a 50% deposit may be reasonable for a bespoke dining table where you order timber and block out workshop time. A 100% upfront payment might be harder to justify unless the customer clearly understands why you're asking for it and what happens if things go wrong.

What If The Preorder Is A Layby Sale?

Some preorder furniture arrangements can also be layby sale agreements under the Fair Trading Act 1986. This can happen where the customer pays by instalments and doesn't take possession until the price is paid in full, depending on the payment structure and the price threshold. A deposit can count as an instalment.

If your preorder is a layby sale, extra rules apply. You need to give the customer clear, written, plain-language disclosure about the layby, including key terms such as the price, payment arrangements, cancellation rights and any cancellation charge. The customer may have a statutory right to cancel at any time before taking possession, and they can cancel in any way that shows they intend to cancel. That means your terms shouldn't say cancellation is only effective if it's made in writing where the layby rules apply.

For layby sales, any cancellation charge must be disclosed and limited to reasonable direct costs. The risk position can also be affected, because the goods may remain at your risk until the customer takes possession. So, if you take deposits or instalments for consumer furniture orders, it's worth checking whether your process falls within the layby regime before you describe an order as non-cancellable or a deposit as non-refundable.

When Can You Keep A Deposit?

You may be able to keep some or all of a deposit if the customer cancels after you've reasonably incurred costs. The amount you keep should be connected to your actual loss or the work already done, and must also comply with any layby sale rules that apply.

For example, if the customer cancels one day after paying and you haven't ordered materials or started design work, keeping the entire deposit may look unfair. If the customer cancels after you've bought custom fabric, cut timber and completed most of the build, keeping a larger amount may be much easier to justify.

Your terms can include a staged cancellation fee, such as:

• cancellation before production starts - admin and design costs may be deducted
• cancellation after materials are ordered - material costs may be deducted
• cancellation after production starts - subject to any statutory cancellation rights, the deposit may be retained, and further costs may be payable
• cancellation after completion - subject to any statutory cancellation rights, the customer may need to pay the full balance

Try to avoid blanket wording like no refunds in any circumstances. For consumer sales, that kind of wording can be risky because it may mislead customers about their legal rights.

What Should Your Lead Time Clause Say?

Your lead time clause should give a realistic timeframe and explain what can affect it. If you give a delivery estimate, you need reasonable grounds for that estimate under the Fair Trading Act 1986.

Lead times are one of the biggest pressure points in preorder furniture sales. Customers are often patient when they understand the process, but they can become frustrated if the timeline keeps moving without updates.

Your lead time clause should cover:

• when the lead time starts, such as after the deposit is paid and final specifications are approved
• whether the timeframe is an estimate or a fixed delivery date
• common causes of delay, such as supplier delays, shipping delays, fabric availability or customer changes
• how you'll update the customer if timing changes
• what options the customer has if the delay becomes significant

Be careful with phrases like delivery guaranteed in 6 weeks unless you're genuinely prepared to meet that date. If you don't have control over imported hardware, upholstery fabric or freight, say so clearly.

Example Scenario

Mia runs a custom furniture studio in Wellington. A customer orders a made-to-order oak sideboard, pays a 40% deposit and chooses a specific imported handle.

Mia's terms say the lead time is 10 to 12 weeks from final design approval, but imported components can affect timing. In week 6, the handle supplier tells Mia the handle is out of stock for another month.

Because Mia's terms are clear, she can contact the customer early and offer practical options:

• wait for the original handle and accept a revised delivery estimate
• choose a similar handle that's available now
• approve the sideboard without handles and have them fitted later if that suits the design

That doesn't remove Mia's Consumer Guarantees Act obligations, but it gives both sides a fair path forward instead of a last-minute argument.

What Happens If Production Is Delayed?

If production is delayed, your legal position depends on what you promised, why the delay happened and whether the delay is reasonable in the circumstances.

Under the Consumer Guarantees Act 1993, services must be carried out within a reasonable time if no time has been agreed. Goods must also meet the relevant consumer guarantees, including acceptable quality, fitness for purpose and matching description or sample.

For custom products, the law doesn't expect you to control every supplier or shipping issue. But you should avoid making promises you can't support, and you should communicate delays promptly.

A practical delay clause might explain that:

• lead times are estimates unless a fixed date is expressly agreed
• you'll notify the customer as soon as you become aware of a material delay
• customer changes may extend the lead time
• delays caused by third-party suppliers may require a revised delivery date
• if a delay becomes unreasonable, the customer may have rights to a remedy under the Consumer Guarantees Act 1993

The Fair Trading Act 1986 also matters here. You shouldn't advertise lead times that you know are unrealistic, or keep taking preorders based on outdated timing if your supply chain has clearly changed.

If your business sells through a website, make sure your product pages, checkout wording, order confirmation emails and website terms all say the same thing. Inconsistent wording is where many refund arguments start.

Can Customers Cancel Or Change A Made-To-Order Furniture Order?

Yes, customers can ask to cancel or change an order, but you don't always have to agree on their preferred terms. Your rights depend on your contract terms, how far production has progressed, whether statutory cancellation rights apply and whether you've breached your obligations.

A good cancellation and variation clause gives you a calm process to follow. It should set out when changes are allowed, when they're not, and who pays for the extra work.

Customer Cancellations

Your preorder refund policy in NZ should distinguish between a change of mind cancellation and a cancellation because something has gone wrong.

If the customer simply changes their mind, your terms can say that, subject to any statutory cancellation rights:

• you ask customers to confirm cancellations in writing so there's a clear record
• you may deduct reasonable costs already incurred
• custom materials may not be refundable
• production stages may apply where cancellation isn't accepted or reasonable cancellation costs apply
• the customer may still need to pay the balance if the product is completed as agreed

For layby sales, you can't remove the customer's statutory right to cancel before taking possession. Your remedy is usually a permitted cancellation charge or refund adjustment that complies with the Fair Trading Act 1986, rather than simply saying the order is non-cancellable.

If the customer cancels because you've failed to supply within a reasonable time, supplied something materially different or the item has a serious defect, you need to consider their Consumer Guarantees Act remedies. Your terms shouldn't suggest those rights don't exist.

Customer Variations

Variations are common in furniture orders. A customer might change the dimensions, fabric, stain, leg style or delivery address.

Your terms should say that variations:

• must be requested in writing
• are only accepted once you confirm them
• may change the price
• may extend the lead time
• may require an additional deposit or payment before work continues

This protects your margins and avoids the awkward situation where a customer says, I mentioned that change on the phone, but your workshop never priced or approved it.

How Do Consumer Guarantees Apply To Custom Products?

Consumer guarantees apply to custom products sold to consumers in New Zealand. You can't contract out of those guarantees just because the furniture is bespoke or made to order.

For furniture, the Consumer Guarantees Act 1993 can require that goods:

• are of acceptable quality
• are fit for a particular purpose the customer told you about
• match the description, sample or model
• are supplied within a reasonable time if no time is agreed
• have spare parts and repair facilities available for a reasonable time, where relevant

If you provide design, measurement, delivery or installation services, those services also need to be carried out with reasonable care and skill.

Customisation affects the practical remedy, but it doesn't remove the customer's rights. For example, if a customer approved a very specific fabric and later decides they don't like the colour, that may be a change of mind issue. But if the sofa arrives with poor stitching, unstable framing or the wrong fabric, the customer may be entitled to a remedy.

The available remedy will depend on whether the failure is minor or serious. A minor issue may usually be repaired within a reasonable time. A serious issue may give the customer stronger rights, including rejection of the goods in some cases.

If you sell to other businesses, you may be able to contract out of the Consumer Guarantees Act for business purposes, but this needs to be in writing and fair and reasonable. Standard form small trade contracts can also be affected by the unfair contract terms rules in the Fair Trading Act 1986. Those rules can apply where the annual value threshold of $250,000 including GST isn't reached when the trading relationship first arises.

What Should Your Delivery And Installation Terms Cover?

Your delivery and installation terms should clearly explain who is responsible for access, timing, costs and risk once the furniture is ready. This is where many otherwise smooth orders can become difficult.

Furniture is bulky, valuable and often made for a specific room. If your team arrives and can't get the table through the doorway, you need a fair process for what happens next.

Your terms should cover:

• whether delivery is included in the price or charged separately
• where you deliver, including any geographic limits
• how delivery dates are booked
• what happens if the customer isn't available at the agreed time
• whether the customer must check access measurements before ordering
• whether stairs, lifts, parking restrictions or rural delivery may attract extra charges
• when risk transfers to the customer, subject to any layby sale or other statutory risk rules
• whether installation, assembly or placement is included

If you offer home delivery or installation, describe exactly what that means. For example, does it include wall mounting, levelling, attaching legs, removing packaging or taking away old furniture? If not, say so.

You should also decide what happens if the customer doesn't take delivery when the item is ready. Your terms might allow you to charge reasonable storage fees after a notice period, provided the customer was clearly told about this upfront.

Try to keep the customer experience in mind. Clear delivery terms don't have to sound harsh. They simply help the customer prepare, and they help your team avoid unpaid extra trips and difficult access issues.

Common Mistakes To Avoid

The most common mistake is treating preorder terms as a formality. For made-to-order furniture, your terms are part of the customer experience and part of your production process.

Watch out for these common issues:

• Overpromising delivery dates: If your suppliers are unpredictable, use realistic estimates and update your wording when conditions change.
• Using absolute no refund wording: This can be misleading if it suggests customers have no rights under the Consumer Guarantees Act 1993, Fair Trading Act 1986 or any layby sale rules that apply.
• Starting work before specifications are final: Make sure the customer signs off dimensions, finishes, fabrics and drawings before production begins.
• Not pricing variations: A small design change can affect materials, labour and timing.
• Forgetting delivery access: Ask customers to check doorways, lifts, stairwells and parking before you build or deliver.
• Having different terms in different places: Your website, quote, invoice and confirmation email should work together.
• Ignoring privacy basics: If you collect customer names, addresses, phone numbers and delivery notes, your handling of that personal information should align with the Privacy Act 2020.

It also helps to train your team on the terms. If your sales team verbally promises something different from your written terms, the customer may rely on that promise.

Key Takeaways

• Made-to-order furniture businesses should use written preorder terms before taking deposits, instalments or starting production.
• A deposit can protect your upfront costs, but a blanket no refund policy can create problems under New Zealand consumer law.
• Some preorder arrangements may be layby sales, which can trigger disclosure rules, cancellation rights, limits on cancellation charges and special risk rules.
• Lead times should be realistic, clearly described and updated if supplier or production delays affect timing.
• The Consumer Guarantees Act 1993 still applies to custom products sold to consumers, including quality, fit for purpose and timing guarantees.
• Your terms should cover cancellations, variations, delivery access, installation, storage and what happens if the customer doesn't take delivery.

If you'd like help with your preorder terms, custom furniture deposit policy, cancellation and refund clauses, and delivery terms, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.