Why Does My Business Need Terms Of Sale? (2026 Updated)

If you’re selling anything in your business - products, services, subscriptions, bookings, digital downloads, or even custom work - you’re already making “sales” in a legal sense.

What many business owners don’t realise is that every sale creates a mini-contract with your customer, whether you’ve written anything down or not. If a payment is disputed, a delivery is late, a customer wants a refund, or something goes wrong with a product, you’ll very quickly wish you’d set the rules upfront.

This updated guide reflects how New Zealand businesses are selling today (especially online) and why having clear Terms Of Sale is one of the simplest ways to protect your cashflow, your time, and your reputation from day one.

What Are “Terms Of Sale” (And Are They Different From Terms And Conditions)?

“Terms of Sale” are the contract terms that apply when you sell goods or services to a customer. They set out the practical rules of the transaction - what the customer is buying, how they pay, when they get it, what happens if something changes, and what your process is if there’s a problem.

You’ll sometimes hear “Terms and Conditions” used as a broader label (especially online). In practice, your business might have:

• Terms of Sale (customer purchasing terms)
• Website Terms of Use (rules for using your website)
• Privacy Policy (how you collect and handle personal info)

For many small businesses, the key legal risk sits in the sale itself - so Terms of Sale are often the document that does the heavy lifting.

Depending on your setup, Terms of Sale might be:

• a standalone document attached to quotes and invoices
• terms embedded into your online checkout flow
• terms printed on the back of order forms
• a “terms of trade” style document for B2B customers

If you sell online, the structure often overlaps with your E-Commerce Terms and Conditions, but the purpose stays the same: making sure you and your customer are on the same page before money changes hands.

What Problems Do Terms Of Sale Actually Prevent?

Most disputes don’t start because someone is trying to be difficult. They start because expectations weren’t aligned.

Terms of Sale reduce that risk by clearly spelling out what “the deal” is.

1. Payment Disputes And Late Payments

Terms of Sale can set out:

• when payment is due (upfront, on delivery, 7 days from invoice, etc.)
• accepted payment methods
• what happens if payment is late (interest, recovery costs, pausing work, etc.)
• deposit rules and whether deposits are refundable

This is especially important for service providers, trades, and project-based work where you’re investing time and materials before the job is finished.

2. Refund And Returns Arguments

Refund conversations are one of the fastest ways to lose time (and goodwill) if you don’t have a clear policy.

Your Terms of Sale can explain your process for:

• returns and exchanges (including timeframes)
• faulty products vs change-of-mind returns
• how customers should contact you and what evidence you need
• who pays return shipping, and when

One important point: your terms can’t take away consumers’ rights under the Consumer Guarantees Act 1993 (more on that below). But clear terms can still prevent confusion and help you manage issues consistently and fairly.

3. Delivery Delays And “Where’s My Order?” Problems

Whether you’re shipping physical goods, delivering digital files, or booking services, timelines matter.

Terms of Sale can cover:

• estimated delivery timeframes (and that they’re estimates)
• courier delays outside your control
• what happens if the customer enters the wrong address
• risk and responsibility for delivery (particularly for B2B sales)

4. Scope Creep For Services

If you sell services (marketing, consulting, design, coaching, software development, trades), it’s very easy for a project to grow beyond what you priced.

Terms of Sale can help by clarifying:

• what’s included vs excluded
• how you handle variations and extra work
• your approval process for additional costs

In some cases, you may need a more tailored contract (for example a Service Agreement) - but Terms of Sale can still support day-to-day sales and smaller jobs.

5. Chargebacks And Online Payment Platform Disputes

If you accept card payments online, you’re exposed to chargebacks (where a customer disputes the transaction with their bank). Banks and platforms often look for evidence of what the customer agreed to.

Having properly presented Terms of Sale - and keeping records of acceptance - can make a real difference when you need to respond quickly with proof.

What Should Terms Of Sale Include For A New Zealand Business?

There’s no one-size-fits-all checklist because what you sell (and who you sell to) changes what you need. But most NZ businesses will want to cover the following core areas.

Sale Basics

• Who you are (your business name/entity details)
• What you’re selling and how orders are placed/accepted
• Pricing (including GST, currency, and whether pricing can change)
• Payment terms (due dates, deposits, late fees, and recovery costs)

Delivery, Performance, And Timing

• delivery methods and timeframes
• collection rules (if customers pick up)
• what happens if you can’t supply (stock issues, supplier delays)
• service delivery timelines and what you need from the customer to proceed

Returns, Refunds, And Cancellations

• change-of-mind returns (if you offer them) and the conditions
• faulty goods process (aligned with consumer law)
• cancellation rules for bookings/services
• rescheduling and no-show fees (where appropriate)

If your business charges cancellation or rescheduling fees, it’s worth making sure your approach is consistent with reasonable customer expectations. A common place businesses tighten this up is by aligning with guidance like cancellation fees for services (especially where you’re setting aside time, staff, or resources).

Risk Allocation And Liability

Terms of Sale often include clauses about:

• limits on liability (where legally permitted)
• what you’re not responsible for (e.g. delays outside your control)
• customer obligations (e.g. providing accurate information, safe access for trades)

This area needs careful drafting. Overreaching clauses can be unenforceable, and if you sell to consumers you can’t contract out of the Consumer Guarantees Act in most cases.

Dispute Resolution And Practical “Process” Clauses

When something goes wrong, you want a process that’s calm, consistent, and fair. Terms of Sale can set out:

• how customers contact you (and how quickly you’ll respond)
• what information you need to investigate
• steps before escalation (for example, written notice first)
• governing law (New Zealand law)

How Do Terms Of Sale Interact With NZ Consumer Law?

This is where a lot of businesses accidentally get it wrong - not because they’re trying to mislead anyone, but because generic templates (often written for other countries) don’t match New Zealand rules.

In NZ, your sales practices are heavily influenced by:

• Consumer Guarantees Act 1993 (CGA) - sets minimum guarantees for consumer purchases (like acceptable quality, fitness for purpose, and matching description).
• Fair Trading Act 1986 (FTA) - prohibits misleading or deceptive conduct and sets rules around representations you make (including advertising claims).
• Contract and Commercial Law Act 2017 - provides a lot of the “default” contract rules when terms aren’t clear.

You Can’t “Write Your Way Out” Of The CGA

If you sell to consumers in trade, the CGA generally applies automatically. That means:

• you usually can’t say “no refunds” for faulty goods
• you usually can’t force a consumer to accept store credit instead of a remedy that the CGA requires
• you generally can’t exclude CGA rights in your terms (unless it’s a genuine business-to-business sale and you properly contract out)

Well-drafted Terms of Sale don’t try to remove these rights. Instead, they explain how you handle issues in a way that’s consistent with the law and easy for customers to understand.

Misleading Claims Can Create Big Headaches

Under the Fair Trading Act, you need to be careful about what you promise in marketing and on product pages.

For example, if you advertise “delivery in 24 hours” but it’s really “dispatch in 24 hours”, your Terms of Sale won’t automatically save you. Your terms should match what you actually do, and your advertising should match your terms.

This is also why it’s smart to keep your Terms of Sale aligned with any other public-facing statements you make - like FAQs, Instagram posts, and refund pages.

Do I Need Different Terms Of Sale For Online Sales, In-Store Sales, And B2B?

Often, yes - or at least you need terms that are designed for the way you sell.

A common mistake is having one set of terms that “sort of” covers everything. The result is usually gaps where the real disputes happen.

Online Sales

Online selling raises practical questions like:

• how customers accept your terms (tick box, checkout notice, account sign-up)
• digital delivery and access rules
• subscriptions and recurring payments
• chargebacks and identity verification

If you sell through a website, your Terms of Sale often sit inside (or alongside) your online shop terms, so it’s clear what applies at the point of purchase.

In-Store Or Face-To-Face Sales

If you sell in person, your biggest issues are usually:

• how you notify customers of the terms (signage, receipts, point-of-sale prompts)
• returns processes at the counter
• warranties (and how they interact with CGA rights)

B2B Sales (Supplying Other Businesses)

If you mainly sell to other businesses (wholesale, commercial supply, trade accounts), your Terms of Sale can be more detailed and protective. For example, B2B terms often cover:

• credit accounts and credit limits
• security interests in goods supplied (PPSA-related concepts)
• retention of title (who owns goods until paid)
• the ability to contract out of the CGA (where legally available and properly done)

B2B terms are sometimes called “terms of trade”, and they’re usually tailored around invoicing, credit, and delivery risk.

How Do I Make My Terms Of Sale Legally Binding?

Having Terms of Sale isn’t enough on its own - you also need to make sure they’re properly incorporated into your customer contracts. In other words, your customer has to have a reasonable opportunity to see them and agree to them before the sale is final.

Some practical ways to do that include:

• Online checkout: a clear link to the terms next to a statement like “By placing your order, you agree to our Terms of Sale.” (A tick box can also help, depending on your setup.)
• Quotes: include the terms with the quote, or link them clearly, and state the quote is subject to them.
• Invoices: invoices can help reinforce terms, but ideally customers should see the terms earlier (at quote or order stage).
• Booking forms: include the terms at the time of booking, not after.
• Trade accounts: have a sign-up form that expressly accepts the terms.

If you want a useful rule of thumb: don’t leave your terms until after the customer has already paid. By then, it’s much harder to argue they agreed to them.

Don’t Forget Privacy (Especially If You Sell Online)

If your sales process collects personal information (names, emails, phone numbers, addresses, payment confirmations, IP addresses), you’ll also want to make sure your Privacy Policy is up to date and easy to find.

Terms of Sale and privacy documents do different jobs, but they should work together - especially where you’re using customer data for delivery, support, or marketing.

Be Careful With Templates

It’s tempting to grab a free template online, but this is where we see businesses get caught out. Common template problems include:

• the terms referencing overseas laws (or the wrong consumer rights)
• refund clauses that conflict with the Consumer Guarantees Act
• unclear cancellation and delivery clauses that don’t match how you actually operate
• limitations of liability that are too broad to be enforceable

If your terms don’t fit your real processes, they won’t help you when you need them most.

Key Takeaways

• Terms of Sale set the ground rules for your transactions and help prevent common disputes around payment, refunds, delivery, and cancellations.
• Even if you don’t have written terms, every sale still creates legal obligations - written Terms of Sale simply make expectations clearer and easier to enforce.
• Your Terms of Sale need to align with New Zealand laws like the Consumer Guarantees Act 1993 and Fair Trading Act 1986, especially if you sell to consumers.
• Online sales often need extra protections for chargebacks, delivery timing, and acceptance of terms at checkout.
• To be effective, Terms of Sale should be shown to customers before purchase and incorporated into your quoting, ordering, or checkout process.
• Generic templates can create real risk if they don’t match your business model or NZ legal requirements, so tailored drafting is usually worth it.

If you’d like help putting the right Terms of Sale in place (or updating existing ones), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.