Why Does My Business Need Terms Of Sale? (2025 Updated)

Contents

As a new business in 2025, one of your top priorities will be laying the foundations for healthy relationships with your customers.

When you’re striking deals and selling goods, you and your customers need a clear framework that outlines where you both stand in the transaction and what your rights and responsibilities are.

You’ll also require a robust method of protecting your rights and avoiding unnecessary disputes should a sale or deal not go to plan.

To help with this, it’s wise to have properly drafted Terms of Sale for your business, ensuring they reflect the latest consumer laws and industry practices in 2025.

What Are Terms of Sale?

Terms of Sale are the conditions that a buyer and seller agree upon, setting out the guidelines that govern the relationship between you and your customers.

In essence, Terms of Sale form part of your Business Terms and Conditions, and you might also hear them referred to as Client Agreements, Customer Contracts, or even Service Agreements. Regardless of the terminology, they serve the same purpose: to create a contractual agreement that can protect both parties.

When Do I Need Terms of Sale?

If your business is supplying goods or services, it’s prudent to have Terms of Sale in place at every transaction.

These terms act as an essential reference point, clarifying what you expect from your customers and what they can expect from you. They are particularly valuable in today’s fast-paced digital marketplace, where transactions often occur online.

Moreover, having standardised Terms of Sale can streamline your transactions, ensuring consistency across every sale. This also helps to reduce the likelihood of disputes by clearly setting out each party’s obligations.

In the event of any disagreement, well-drafted Terms of Sale make it easier to pinpoint the positions of both you and your customer. This clarity can be critical when resolving issues swiftly and fairly.

Your Terms of Sale also provide an avenue for including disclaimers and limiting liability, protecting you against unfounded claims. If you’re curious about disclaimers and how they can safeguard your business, you might enjoy our article on disclaimers for further insights.

How Do I Use Terms of Sale?

Terms of Sale can be formatted as a formal contract to be signed between your business and your customers.

However, it is often more practical to present the terms in a format that is attached to invoices, forms, or proposals, drafted in a manner that does not require an explicit signature for acceptance. Instead, you can include language stating: “Customers are bound by these Terms of Sale when they order, accept or pay for any products or services provided by us, which are subject to these terms.”

This method is effective provided that you ensure your customers have easy access to your terms before or at the point of sale.

What’s Included in Terms of Sale?

The specific contents of your Terms of Sale will be tailored to your business and the nature of the goods or services you provide. However, certain elements are typically featured in almost every set of Terms of Sale.

These key details often include the price, method of payment, delivery arrangements, returns policy, warranties, and the extent of liability. Let’s break these details down:

Price

This refers to the price agreed upon between you and your customers for the goods or services.

Payment

Here you specify when and how payment should be made, any up-front payment requirements, and the consequences of late payment (such as accrual of interest or late fees).

Delivery/Shipping

This section outlines what is being delivered, the method of delivery, delivery destinations, associated costs, and expected delivery timelines.

Returns and Refunds

You should clearly set out the conditions under which a product may be returned or refunded, including relevant timeframes and any fees involved. Your returns policy must comply with New Zealand’s Consumer Guarantees Act (CGA) as updated for 2025.

Warranties

This section confirms whether a warranty is provided, what it covers, its duration, and any circumstances under which it may become void. Again, compliance with the CGA is essential.

Liability

Detail the extent to which your business is liable if an issue arises resulting in loss or damage. It is prudent to include limitations of liability to protect your business from excessive claims.

In addition, consider addressing any data protection and digital security matters, especially if your transactions occur online. For more on safeguarding your digital assets and ensuring compliance, our guide on Online Business Privacy is a useful resource.

Takeaway

Getting your Terms of Sale right is crucial for clarifying the commercial relationship between you and your customer, limiting liability, and protecting your business in the event something goes awry. A well-drafted set of Terms fosters trust and efficiency, making each transaction smoother and more transparent.

A robust Terms of Sale framework leaves you feeling confident and secure after every deal, providing clarity on what both parties can rightfully expect. As market conditions evolve in 2025, regularly reviewing and updating your Terms is essential to remain compliant with new legislation and consumer expectations.

That’s why if you need help establishing or refining your business’s Terms of Sale, it would be wise to consult a lawyer rather than relying on standard templates. For customised legal support, consider our dedicated service that ensures your terms precisely match your business’s operations and risk profile.

At Sprintlaw, our team of experienced lawyers can assist you in drafting bespoke Terms of Sale, tailored to your business needs in 2025. For further insights on business legal setup, you might also appreciate our Business Set-Up Guides and our detailed Online Shop Terms and Conditions resources. We’re available for a no-obligation chat on 0800 002 184 or at [email protected].

Adam Watters

Adam is a legal intern at Sprintlaw. He is currently completing his double degree in Law and Commerce at Macquarie University. With interests in contracts and accounting, he is looking to complete further study and gain experience in the area of commercial law.

Amelia Abbott

Amelia is a commercial lawyer with a background in major projects, IP and IT outsourcing. Before joining the Sprintlaw team, Amelia worked at two national law firms and completed her studies in Law and Psychology at the New Zealand National University.