Importer Terms And Conditions: What To Include

Importing products into Australia can be a great way to build a wholesale business, but the moving parts can get messy quickly. Goods may be delayed at the port, damaged in transit, rejected by a retailer or caught up in a product safety issue.

Your importer terms and conditions are where you set the rules with your wholesale customers. They should explain how orders work, when risk passes, what happens with defects and returns, and who does what if a product needs to be recalled.

The right terms won't fix every problem, but they can give you a clear process when something goes wrong and help protect your margins as you grow.

What Are Importer Terms And Conditions?

Importer terms and conditions are the business terms and conditions you give to Australian wholesale customers when you supply imported goods to them. They sit between your international supplier arrangements and your local customer relationships.

If you import stock and on-sell it to retailers, distributors, online stores, trades or other business customers, your terms should cover more than just price and payment. Import businesses usually need extra clauses because there are more points where things can go wrong, including:

• customs clearance and biosecurity delays
• international freight disruption
• incorrect product labelling or documentation
• damage during domestic delivery
• defects discovered after goods reach your customer
• Australian Consumer Law claims from end customers
• product recalls and safety notices

Your terms should work with your quotes, purchase orders, invoices, credit applications and website ordering process. If those documents say different things, you can end up arguing about which terms apply.

A practical approach is to make your terms apply whenever a customer places an order with you, accepts a quote, opens a trade account or pays an invoice. You should also make sure your customer has had a real chance to read them, especially if you're trying to rely on limits of liability, inspection deadlines or return rules.

Templates can be a useful starting point, but importer terms often need tailoring. A business importing skincare, electrical goods or children's products will need different protections to a business importing furniture or spare parts.

What Clauses Should Your Wholesale Terms Include?

Your wholesale terms and conditions should include the practical rules for ordering, delivery, defects, returns, liability and compliance. The aim is to remove surprises, especially when you're dealing with repeat customers and high-volume orders.

At a minimum, your importer terms and conditions should deal with:

• Orders and acceptance: when an order becomes binding, whether you can reject or partially accept an order, and how backorders work.
• Pricing: whether prices include or exclude GST, freight, insurance, duties and handling fees. Get tax advice for tax-specific treatment if needed.
• Minimum order quantities: carton lots, pallet quantities, split packs and any minimum order value.
• Delivery: delivery addresses, authority to leave, missed delivery fees and whether delivery dates are estimates.
• Risk and title: when the customer becomes responsible for loss or damage, and when ownership transfers.
• Inspection and defects: how quickly customers need to check goods and report visible damage, shortages or defects.
• Returns: what can be returned, whether returns need approval, and who pays freight.
• Product information: how customers can use product descriptions, images, safety information and instructions.
• Compliance obligations: who is responsible for following product safety rules, labelling rules and any industry-specific requirements.
• Recall process: customer cooperation, records, notifications and stock quarantine.
• Liability and indemnities: what losses are excluded or capped, while still respecting the Australian Consumer Law.

For example, if you sell imported kitchen appliances to retailers, your terms might require retailers to keep batch records, follow your product safety instructions and stop selling affected stock immediately if you issue a recall notice. Without that wording, you may have to rely on goodwill when you need a fast response.

Who Carries The Risk If Goods Are Delayed Or Damaged?

It depends on what your terms say, but your contract should clearly state when risk passes from your business to your customer. If it doesn't, you may end up paying for losses that were outside your control.

Risk is about who bears the loss if goods are damaged, lost or delayed. Title is about who owns the goods. They don't have to pass at the same time.

Many importers choose one of these positions for domestic wholesale sales:

• risk passes when goods are collected from your warehouse by the customer or their carrier
• risk passes when goods are delivered to the customer's nominated address
• risk passes when goods are handed to your nominated courier
• risk remains with you until the customer signs for delivery

There's no single correct answer. It depends on your bargaining power, freight arrangements, insurance and customer expectations.

Your delivery clause should also deal with customs and freight delays. If stock is still with your overseas manufacturer, under your supplier agreement, on a vessel, at the port or waiting for Australian Border Force or biosecurity clearance, you usually don't want a delivery estimate to become a hard promise unless you've agreed to that very clearly.

Say Priya imports ceramic dinnerware and sells it to homewares stores. A retailer orders 200 cartons for a Christmas promotion, with delivery estimated for 1 December. The shipment is held for biosecurity inspection and arrives on 8 December. If Priya's terms say delivery dates are estimates and customs delays are outside her control, the retailer may still be frustrated, but Priya has a stronger position against cancellation or a damages claim.

If you supply on credit and want to retain ownership until payment, your terms may also need retention of title wording and Personal Property Securities Register considerations. This is worth tailoring, because wording that looks fine on an invoice may not protect you properly if a customer becomes insolvent.

How Do Australian Consumer Law Rules Affect Importers?

The Australian Consumer Law affects importers because you may be treated as a manufacturer and you can't simply contract out of consumer guarantees. This can apply even if you only sell to wholesale customers.

The Australian Consumer Law is found in Schedule 2 to the Competition and Consumer Act 2010. It includes consumer guarantees, misleading or deceptive conduct rules, product safety rules and product liability provisions.

A customer can be a consumer under the ACL if the goods cost $100,000 or less, or if the goods are ordinarily bought for personal, domestic or household use. There are also special rules for certain vehicles and trailers used mainly to transport goods on public roads. Goods bought for resupply or to use up or transform in production are generally treated differently.

For importers, this matters because:

• your wholesale customer may have ACL rights even though they're a business
• end customers may make claims about unsafe or defective products
• you may be treated as the manufacturer if the actual manufacturer doesn't have a place of business in Australia
• you can't use your terms to remove non-excludable consumer guarantees

Your terms can still manage risk. For example, for goods not ordinarily acquired for personal, domestic or household use, you may be able to limit remedies to repair, replacement, resupply or the cost of those things, where the ACL allows and the limitation is fair and reasonable.

Your terms should avoid blanket statements like no refunds in all circumstances. They can create ACL issues and make your business look less credible. A better approach is to separate change-of-mind returns from legal remedies for faulty, unsafe or misdescribed goods.

What Should Your Terms Say About Defects, Returns And Recalls?

Your terms should set a clear reporting process for defects and returns, while preserving rights that can't be excluded under the ACL. This helps you respond quickly and gather evidence while the issue is still fresh.

Defects And Shortages

For wholesale customers, it's common to require inspection soon after delivery. For example, you might ask customers to report transit damage or shortages within 48 hours of delivery and visible defects within 7 days. Those periods are commercial settings, not universal legal deadlines, so they should suit your products and supply chain.

Your terms can ask customers to provide:

• order number and invoice number
• photos of the goods, packaging and labels
• batch, serial or lot numbers
• a description of the issue
• confirmation of whether the goods have been used, altered or resold

You can also state that customers shouldn't return goods without a return authorisation. That prevents stock arriving at your warehouse with no paperwork and no way to assess what happened.

Change-Of-Mind Returns

You don't have to offer change-of-mind returns to wholesale customers unless you've agreed to do so in your credit terms or trade account terms. If you do allow them, your terms should say whether you charge a restocking fee, require goods to be unopened, exclude clearance stock or require return freight at the customer's cost.

Recalls And Safety Issues

Your recall clause should require customers to cooperate if a product safety issue arises. That may include stopping sales, quarantining stock, giving you customer or stock location information where lawful, displaying notices and helping collect affected goods.

Under the ACL, suppliers who take recall action generally need to notify the Commonwealth Minister within 2 days after taking that action, usually through the Product Safety Australia process managed by the ACCC. Separate mandatory reporting rules can also require a report within 2 days after you become aware that a product may have caused death, serious injury or serious illness.

Your terms should support your recall plan, not replace it. If you're importing regulated goods, such as electrical products, cosmetics, toys, food contact materials or therapeutic goods, you may also need sector-specific compliance steps.

Importer Terms And Conditions Template: What To Include

A good importer terms template should be tailored before you use it, because the details change depending on your products, customers and delivery model. Use the outline below as a drafting checklist, not as a finished legal document.

1. Parties And Application: identify your business, your customer and when the terms apply to quotes, orders, invoices and trade accounts.
2. Orders: explain how orders are placed, when they're accepted, and when you can reject, vary or cancel an order.
3. Product Information: say how specifications, photos, samples and catalogues should be treated, including any tolerances or substitutions.
4. Pricing And Charges: set out pricing rules, freight, insurance, handling fees, customs-related charges and currency issues where relevant.
5. Delivery And Delays: state delivery methods, estimated dates, partial deliveries, authority to leave, failed delivery fees and delays outside your control.
6. Risk And Title: explain when risk passes, when ownership passes and whether you retain title until payment.
7. Inspection And Defects: set reporting timeframes, evidence requirements and how you'll assess claims.
8. Returns: separate approved commercial returns from ACL remedies for faulty or non-compliant goods.
9. Customer Obligations: require safe storage, correct handling, no relabelling without approval and compliance with your instructions.
10. Product Compliance: cover labelling, warnings, mandatory standards, product bans and customer cooperation with compliance checks.
11. Recalls: set out notice, stock quarantine, customer communication, records and return or disposal steps.
12. Liability: include sensible exclusions, caps and indemnities that don't cut across non-excludable ACL rights.
13. Confidentiality And IP: protect your pricing, supplier information, trade materials, product images and brand assets.
14. Dispute Process: require both sides to raise issues promptly and try to resolve them before the relationship breaks down.
15. Governing Law: choose the Australian state or territory law that applies to your contract.

You should also line this up with your upstream supplier contract. If your overseas supplier gives you only 5 days to report defects, but your customer terms allow 30 days, you may be stuck in the middle with no practical recovery path.

Common Mistakes To Avoid

The biggest mistake is using generic wholesale terms that don't deal with import risk. Standard sale terms can miss the exact issues that make importer disputes expensive.

Watch out for these common problems:

• No clear risk transfer: you may be left arguing about who was responsible when goods were damaged by a carrier.
• Delivery dates that sound guaranteed: customers may treat an estimate as a firm deadline if your wording is loose.
• No customs delay clause: port, quarantine or documentation delays can put you in breach unless your terms deal with them.
• Overstated no refund wording: this can clash with the ACL and create avoidable regulator or customer complaints.
• No recall cooperation clause: you may struggle to trace stock quickly if a safety issue arises.
• No batch or lot record requirements: this makes defects harder to investigate and recalls harder to narrow.
• Mismatch with supplier terms: your customer promise may be wider than what you can recover from your manufacturer.
• Unclear product information controls: retailers may reuse outdated images, claims or instructions in a way that creates compliance risk.

If something has already gone wrong, start by preserving records. Keep the purchase order, delivery documents, photos, batch numbers, customer emails, supplier correspondence and any inspection reports. Then check what your terms say about notice, evidence, returns and remedies.

If the issue involves safety, injury, serious illness, a mandatory standard or a possible recall, get help early. The first few days can matter, especially where the ACL's 2 day reporting rules may be triggered.

Key Takeaways

• Importer terms and conditions should cover delivery risk, customs delays, defects, returns, product compliance and recalls.
• The ACL can still apply in business-to-business sales, and importers may be treated as manufacturers for some product liability purposes.
• Your terms should separate change-of-mind returns from legal remedies for faulty, unsafe or misdescribed goods.
• Clear inspection, evidence and return procedures help you respond quickly when a customer reports damage or defects.
• Recall clauses should require customers to stop sales, quarantine stock, share records and cooperate with safety notices.
• Your customer terms should line up with your overseas supplier terms, so you're not left carrying a gap.

If you'd like help with your wholesale sale terms, delivery and returns clauses, product liability wording or recall procedures, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.