Terms and Conditions of Sale in New Zealand: What Businesses Should Include

If your business sells goods or services without clear terms and conditions of sale, you are relying on assumptions. That is where payment disputes, refund arguments, delivery complaints and scope creep usually start. Many New Zealand businesses make the same mistakes, they copy overseas terms that do not fit local law, they leave key points buried in quotes or emails, or they assume a customer is bound by terms they never properly saw.

Good sale terms do more than look professional. They set out when a contract is formed, how payment works, what happens if stock is delayed, what limits apply to your liability and when a customer can cancel. They also need to sit properly with New Zealand consumer law, especially if you deal with retail customers or small trade customers who may still have legal protections.

This guide explains what terms and conditions of sale usually cover, what New Zealand businesses should check before they sign or issue them, and the common drafting mistakes that cause trouble later.

Overview

Terms and conditions of sale are the rules that apply when you supply goods or services to a customer. For New Zealand businesses, the key issue is not just what your terms say, but whether they are clear, fair, consistent with mandatory laws and actually incorporated into the deal before the customer commits.

• Define exactly what you are selling, including any limits on scope, specifications or delivery.
• State when the contract is formed, when payment is due and what happens if payment is late.
• Set out delivery, risk and title terms, especially if goods are shipped or collected.
• Deal with cancellations, returns, refunds and what happens if you cannot supply on time.
• Include suitable limitations of liability, but only in a way that works under New Zealand law.
• Make sure your terms fit with the Consumer Guarantees Act, the Fair Trading Act and any privacy obligations or privacy notice requirements that apply.
• Use a process that clearly brings the terms to the customer’s attention before you accept an order.

What Terms and Conditions of Sale Means For New Zealand Businesses

Terms and conditions of sale set the legal ground rules for each transaction, and they matter most when something goes wrong.

For a founder or manager, that usually means one practical question: if a customer disputes payment, delivery, defects, timing or cancellation, what written terms can you actually point to?

What these terms usually do

A proper set of sale terms records the commercial deal in a way that can be used across repeat transactions. Instead of renegotiating the basics every time, your business uses one consistent framework.

Most terms and conditions of sale cover points such as:

• the goods or services being supplied
• pricing and when quotes expire
• how and when orders are accepted
• payment timing and interest on overdue invoices
• delivery dates, shipping arrangements and delays
• risk, title and ownership of goods
• returns, repairs, replacements and refunds
• warranties and exclusions
• liability caps and excluded loss
• cancellation rights
• events outside your control
• dispute process and governing law

Why New Zealand law matters

New Zealand businesses cannot simply write whatever they want into a contract and assume it will apply. Some legal rights cannot be contracted out of in consumer transactions, and some clauses will be interpreted narrowly if they are vague or buried.

If you sell to consumers, the Consumer Guarantees Act 1993 may imply guarantees into the supply of goods and services. Those guarantees relate to matters such as acceptable quality, fitness for purpose, matching description and reasonable care and skill. Your sale terms should not promise rights that conflict with those standards, and they should not suggest a customer has fewer rights than the law gives them.

If you sell to business customers, there may be more room to contract out of parts of the Consumer Guarantees Act, but only if the legal requirements are met and the arrangement is genuinely business to business. This is one of the areas where founders often get caught, especially when they use one set of terms across both consumer and trade sales.

The Fair Trading Act 1986 also matters. Your advertising, product descriptions, pricing statements and sales representations must not be misleading or deceptive. Even well drafted sale terms will not fix a problem if your staff or marketing material made a promise that says something different.

How terms become binding

Your customer is not automatically bound just because your invoice says “all sales subject to terms and conditions”. The safer approach is to make sure the terms are provided before the order is placed or before you accept it, and that your process makes it obvious those terms apply.

That might happen through an online checkout, a signed order form, a quotation accepted with attached terms, or a credit application that includes the trading terms. The exact method can vary, but the principle stays the same. The customer should have a fair chance to see the terms before the contract is formed.

This matters in real situations such as:

• a wholesaler sending stock to a retailer after a phone order
• a service business issuing a quote and then starting work after a verbal go ahead
• an ecommerce store taking payment before the customer has seen delivery and refund terms
• a manufacturer relying on retention of title wording that was only added to an invoice after dispatch

What businesses should usually include

The right content depends on what you sell, who you sell to and how your sales process works. Still, most New Zealand businesses should think carefully about a core group of clauses.

Those clauses often include:

• Order acceptance, when you are free to reject an order, when a quote is only an invitation to treat, and when the contract starts.
• Price and payment, including deposits, instalments, invoice timeframes, card fees if used, and what happens on non payment.
• Delivery and timing, whether dates are estimates only, whether partial delivery is allowed, and who pays freight.
• Risk and title, when risk passes to the customer, and when ownership passes if payment is delayed.
• Changes and variations, especially for custom work, made to order goods or service scope changes.
• Cancellation, including restocking fees, non refundable deposits or charges for work already performed, if legally appropriate.
• Faults and claims, how quickly customers must notify issues, and what remedy process applies.
• Liability limits, such as excluding indirect loss and capping liability to the price paid, where enforceable.
• Force majeure style events, covering supply disruption, freight issues or other events beyond reasonable control.
• Privacy and data use, if customer information is collected for accounts, delivery or credit checks.

The strongest terms are tailored to the actual founder moment. If your business relies on imported stock, delivery delay wording matters. If you do custom project work, scope and variation clauses matter. If you extend trade credit, payment default and security issues matter far more than generic website terms.

Legal Issues To Check Before You Sign

Before you sign a contract, issue a quote or accept the provider's standard terms, check whether the legal mechanics of the sale match how your business really operates.

A lot of disputes come from documents that look finished but do not reflect the sales process on the ground.

Consumer or business customer

Your first question should be who you are selling to. A sale to an individual buying for personal use raises different issues from a sale to a company buying for trade purposes.

If you deal with consumers, your terms need to work alongside mandatory consumer rights. You should be especially careful with clauses that try to exclude warranties, refuse all refunds or limit remedies too aggressively.

If you deal with business customers, you may be able to contract out of parts of the Consumer Guarantees Act in some cases. That wording should be precise, and your sales records should support the position that the customer acquired the goods or services for business purposes.

Goods, services, or a mixed supply

The next issue is what exactly you are supplying. Goods and services often need different wording, and many SMEs supply both.

For goods, the main pressure points often include:

• specifications
• availability
• delivery dates
• damage in transit
• returns
• ownership and risk

For services, the key issues often include:

• scope of work
• assumptions and exclusions
• timing and milestones
• client dependencies
• variation charges
• acceptance of deliverables

If you supply both, your terms need to make clear which clauses apply to which part of the deal.

When the contract is formed

This is one of the most overlooked issues. If your quote says one thing, your purchase order says another and your invoice adds extra terms later, it may not be obvious which terms govern the deal.

Your process should answer points such as:

• Is a quote binding, and for how long?
• Does the customer place an order by email, purchase order, checkout or signed form?
• When do you accept the order?
• What happens if the customer sends its own standard terms?
• Can you start work before formal acceptance, and if so, on what basis?

This is especially important in B2B supply chains where each side has its own standard terms. Before you rely on a verbal promise or a brief email exchange, make sure you know which document wins if there is a conflict.

Payment, credit and enforcement

If you allow payment after delivery, your terms should support your credit control process. A short clause saying payment is due in seven days is rarely enough if a customer pays late or becomes difficult.

Think about whether your terms should cover:

• deposits or upfront payment
• credit limits
• suspension of further supply for overdue accounts
• default interest
• recovery costs, where appropriate
• personal guarantees for higher risk trade accounts
• retention of title for goods supplied on credit

Not every business needs every tool. The point is to match your terms to your real exposure.

Liability and insurance position

A liability clause should reflect the actual risks in the deal, not just a generic attempt to exclude everything.

If your product could cause business interruption, property damage or data issues, the liability clause needs careful thought. The same goes if you install equipment, give technical advice or rely on subcontractors. Your insurance obligations and arrangements should also be checked against the promises you make in the contract.

Before you sign, ask whether your terms clearly address:

• what losses are excluded
• whether indirect or consequential loss is excluded
• any cap on total liability
• whether the cap is tied to fees paid, replacement cost or insurance cover
• carve outs for non excludable rights

Consistency across documents

Your quote, proposal, order form, invoice and internal sales script should not contradict each other. A carefully drafted set of terms can be undermined by a salesperson promising “full refunds anytime” or “guaranteed delivery by Friday” when the written terms say otherwise.

This is where basic contract housekeeping matters. Keep one consistent position across customer facing documents, train staff on what they can promise and update template wording when your process changes.

Common Mistakes With Terms and Conditions of Sale

The most common mistake is treating sale terms as a template exercise instead of a practical risk tool.

Businesses often discover the problem only after a customer refuses to pay, rejects goods, claims a full refund or points to a statement made outside the written contract.

Using offshore or generic templates

Terms copied from Australia, the United Kingdom or the United States often miss New Zealand specific legal concepts. They may refer to the wrong legislation, use unfamiliar terminology or include remedies that do not fit local practice.

Even if the wording looks polished, it may not match how your business invoices, dispatches stock or handles customer claims.

Trying to exclude rights that cannot be excluded

Some businesses include blanket statements like “no refunds under any circumstances” or “all warranties excluded”. Those clauses can create more trouble than protection if they overreach.

For consumer sales, New Zealand law may imply minimum rights despite what the contract says. A clause that ignores that can lead to complaints, regulator attention or damaged trust with customers.

Failing to bring the terms to the customer’s attention

A great set of terms is not much use if the customer never received them until after the deal was done. This happens a lot with invoices, packing slips and email footer references.

If your business wants to rely on standard sale terms, the customer should be able to see them before they place the order or before you accept it. Online businesses should make this process clear at checkout. Offline businesses should build it into quotes, account applications and signed order forms.

Leaving key commercial points vague

Founders sometimes use broad wording because they want flexibility. The problem is that vague drafting makes disputes harder to resolve.

Common weak spots include:

• delivery dates that are described inconsistently
• unclear deposit rules
• no process for customer caused delays
• no right to charge for variations
• no time limit for defect notifications
• uncertain ownership of custom made goods before payment

If a clause matters commercially, it should be precise enough that both sides can follow it without guessing.

Ignoring how refunds and returns work in practice

Returns policy wording often causes friction because it is drafted for convenience rather than actual operations. A warehouse team may accept returns one way, customer support may say another and the written terms may say something else again.

Your terms should line up with the practical process for:

• reporting faulty goods
• approving returns
• shipping costs on returns
• inspection timeframes
• repair, replacement or refund decisions
• non returnable custom or perishable items, if relevant

Missing industry specific issues

Some sectors need more than standard trading terms. If you supply food, health products, software, construction inputs or regulated equipment, extra wording may be needed around compliance, use restrictions, product information, installation assumptions or third party dependencies.

The right approach depends on the business. The point is not to overcomplicate the document, but to cover the risks that show up in your actual customer disputes.

Forgetting privacy and data handling

Many sale arrangements involve customer data, even if the contract is mainly about payment and delivery. If you collect contact details, delivery information, account data or credit information, your processes should align with your Privacy Act obligations.

Your sale terms do not have to carry your full privacy notice or privacy position, but they should not say anything inconsistent with how you collect, use or share customer information.

FAQs

Do New Zealand businesses need written terms and conditions of sale?

No, not in every case, but written terms are strongly recommended. Without them, you are more likely to end up arguing about what was agreed on price, timing, refunds, defects or cancellation.

Can I use the same terms for consumers and business customers?

Sometimes, but one set of terms does not always suit both. Consumer sales and B2B sales can involve different legal rights, especially around contracting out of statutory protections.

Are terms on an invoice enough?

Often no. If the invoice is sent after the order is placed or after supply has begun, it may be too late to introduce important terms. The safer approach is to provide the terms earlier in the sales process.

Can I exclude all liability in my sale terms?

Usually not. Some liability clauses may be enforceable, especially in business to business contracts, but they need careful drafting and cannot remove rights that the law says still apply.

Should online sales terms be different from offline terms?

They may need different mechanics. The core legal issues are similar, but online sales often need clearer wording about checkout acceptance, delivery, digital communications, returns and privacy.

Key Takeaways

• Terms and conditions of sale help New Zealand businesses set clear rules on orders, payment, delivery, returns, cancellation and liability.
• Your terms should match your actual sales process, not just sit in a template or on the back of an invoice.
• Consumer sales need special care because some legal protections cannot be excluded.
• Business to business terms may allow more flexibility, but only if the drafting and contract process are done properly.
• The main risk is often not the wording alone, but whether the customer saw and accepted the terms before the contract was formed.
• Founders should check consistency across quotes, order forms, invoices, marketing claims and staff promises.
• Well drafted sale terms can reduce payment disputes, clarify refund expectations and make it easier to manage supply problems.

If you want help with customer contract drafting, liability clauses, payment and credit terms, or Consumer Guarantees Act wording, you can reach us on 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.