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

If you sell products or services in Australia, you’re making “sales” every day - even if you don’t think of them as legal transactions. A customer orders online, you send an invoice, a client accepts your quote, or someone pays at the counter. Each of these moments is a contract in action.

The problem is that if you don’t set the rules of that contract, the rules will still exist - they’ll just be unclear, inconsistent, or decided later (often when there’s a dispute). That’s where Terms of Sale come in.

Terms of Sale help you get paid on time, reduce misunderstandings, set expectations about refunds and returns, and manage risk in a way that still keeps things fair for your customers. And in 2026, with more sales happening online, more subscription-style arrangements, and more customer scrutiny, having clear Terms of Sale is one of the simplest ways to protect your cashflow and your reputation.

What Are Terms Of Sale (And Who Are They For)?

Terms of Sale are the rules that apply when you sell goods or services to a customer. They’re usually written in plain English and cover what you’re selling, how the customer pays, when you deliver, and what happens if something goes wrong.

Depending on how your business operates, Terms of Sale might appear as:

• terms on the back of an invoice
• terms attached to a quote or proposal
• terms shown at checkout on your website
• terms included in a customer onboarding pack
• terms referenced in a purchase order process (B2B sales)

They’re most common for businesses that do repeat sales (especially B2B), including wholesalers, trades and construction suppliers, agencies, professional services, eCommerce stores, manufacturers, and SaaS or subscription businesses.

In many cases, Terms of Sale work alongside broader Business Terms - but they’re specifically focused on the sale transaction and what happens before, during, and after payment and delivery.

Are Terms Of Sale The Same As Terms & Conditions?

They can overlap, but they’re not always the same thing.

• Terms of Sale usually govern the purchase itself (pricing, payment, delivery, title/risk, returns, liability limits, etc.).
• Website Terms & Conditions usually govern how someone uses your website (accounts, acceptable use, IP, disclaimers and so on).
• Service Agreement / Customer Contract often goes deeper on scope, deliverables, milestones and project governance (especially for higher-value work).

If your business sells in different ways (for example: online + by invoice + longer service engagements), it’s normal to use a mix of documents rather than relying on one “catch-all” set of terms.

Why Terms Of Sale Matter For Australian Businesses In 2026

When everything is going well, it can be tempting to rely on informal practices: “we’ve always done it this way” or “my customers know how it works”. But most sales disputes don’t happen because someone is malicious - they happen because expectations weren’t aligned.

Strong Terms of Sale help you stay consistent, professional, and legally prepared without turning every sale into a negotiation.

They Help You Get Paid (And Stay Paid)

If a customer is slow to pay, disputes an invoice, or wants to delay payment until “they’re happy,” you need a clear framework that answers practical questions like:

• When is payment due?
• Do you require deposits or progress payments?
• Can you charge interest or fees for late payment?
• Can you pause delivery or stop work if payment isn’t made?

Even simple wording around payment timing can prevent cashflow issues from spiralling into a bigger dispute. It also supports your accounts team (or you, if you’re doing the books) to follow a consistent process.

Many businesses also align their Terms of Sale with their invoicing practices, including invoice payment terms and what happens when a customer falls behind.

They Reduce “Scope Creep” And Unclear Deliverables

For service businesses, problems often start with a customer expecting more than what you priced for - extra revisions, additional meetings, more features, or expanded deliverables. Terms of Sale can help by setting clear boundaries around:

• what is (and isn’t) included in the price
• how variations are approved
• additional charges and hourly rates
• timeframes and customer responsibilities (e.g. approvals, providing materials)

This doesn’t replace a detailed project agreement where needed, but it’s a strong baseline for day-to-day work.

They Clarify Delivery, Risk, And “What Happens If It Goes Missing?”

If you sell physical goods, delivery misunderstandings are common. Your Terms of Sale can set expectations on:

• delivery windows (and whether they’re estimates)
• who pays shipping and how it’s calculated
• what happens if the customer isn’t available to receive goods
• when risk transfers (for example, at dispatch vs on delivery)
• how quickly customers must report damaged goods

These terms can be especially important where you’re using third-party couriers, drop-shipping, or multiple warehouses.

They Help You Handle Refunds, Returns, And Complaints With Confidence

Customers often ask things like:

• “Can I change my mind?”
• “Can I get a refund if I’m not happy?”
• “Do you offer exchanges?”
• “What if it breaks after a few months?”

Terms of Sale allow you to respond consistently. They also help your team avoid accidental promises that create liability.

At the same time, your Terms must be consistent with the Australian Consumer Law (ACL) - which gives consumers non-excludable rights and remedies in many circumstances. We’ll unpack this in more detail below.

What Should Be Included In Terms Of Sale?

There’s no single “perfect” set of Terms of Sale, because the right terms depend on what you sell, who you sell to, and how your sales process works. But as a starting point, most Australian businesses should consider including the following areas.

1. Pricing, Quotes, And Price Changes

This section helps manage what the customer is actually agreeing to pay. Common points include:

• whether prices are GST inclusive or exclusive
• how long quotes remain valid
• whether you can correct obvious pricing errors
• when price changes can apply (particularly for ongoing supply arrangements)

Pricing terms should also be consistent with how you advertise prices publicly, including compliance expectations around advertised prices.

2. Orders, Acceptance, And Cancellations

You want clarity on when an order becomes binding and what happens if someone tries to cancel. This is especially important for custom work, made-to-order products, or bookings.

For example, your Terms of Sale may cover:

• how customers place an order (online checkout, email confirmation, purchase order)
• when you can reject an order (e.g. stock unavailability, credit risk)
• cancellation windows and cancellation charges
• what happens if you need to cancel or delay

If you use cancellation fees, they need to be handled carefully so they’re fair and enforceable, and don’t create issues under consumer law. It’s common to align these clauses with the principles discussed in cancellation fees and Australian Consumer Law.

3. Payment Terms, Credit, And Late Payment

This is often the most commercially important part of Terms of Sale, because it directly affects your cashflow.

Your Terms might include:

• payment methods (card, bank transfer, direct debit, payment platforms)
• deposit requirements
• progress payments or milestone-based billing
• timeframes for payment (e.g. “within 7 days of invoice date”)
• what happens if payment is overdue (suspending supply, stopping work, debt recovery steps)
• whether late payment fees or interest apply

If you do want the option to charge a late fee or interest, you need the clause drafted in a way that fits your business model and is reasonable. Many businesses also take guidance from general approaches discussed in late payment fees.

4. Delivery, Timing, And Customer Responsibilities

This part is where you prevent “But I thought it would arrive tomorrow” disputes.

• delivery times (estimated vs guaranteed)
• shipping costs and surcharges
• authority to leave (if relevant)
• what happens if a customer provides the wrong delivery address
• what the customer must do to help you deliver (e.g. provide access, confirm specifications)

5. Returns, Refunds, Warranties, And Defects

This section should be drafted carefully, because it’s where many businesses accidentally overpromise - or worse, try to exclude rights they can’t exclude.

Your Terms of Sale can set out:

• your process for returns and exchanges (timeframes, condition requirements)
• how to report defects
• how you handle “change of mind” returns (if you offer them)
• any voluntary warranties you provide, separate from ACL guarantees

It’s also worth understanding the customer expectations that arise in practice. For example, consumers often assume they automatically get a two-year warranty, which is why it helps to be clear about warranties while still respecting consumer guarantees, as discussed in Australian Consumer Law warranty expectations.

6. Liability, Risk Allocation, And Important Limitations

Terms of Sale are one of the main places businesses try to limit risk - but these clauses need to be realistic, tailored, and consistent with the ACL and unfair contract term rules.

Depending on your business, you might include terms about:

• limiting liability to re-supply or repair (where appropriate)
• excluding liability for things outside your control (e.g. force majeure events)
• indirect or consequential loss exclusions (where enforceable)
• customer obligations (for example, using a product as instructed)

If you rely heavily on liability caps, it’s worth ensuring the overall contract framework is strong and commercial. A dedicated deep dive into this topic is often useful, like limitation of liability clauses.

7. Dispute Resolution And Governing Law

Even if you never need it, having a clear dispute pathway can stop issues escalating.

• how complaints are raised
• timeframes to respond
• whether parties must attempt to resolve disputes before court
• which Australian state/territory law applies (especially if you sell nationally)

How Terms Of Sale Work With Australian Consumer Law (ACL)

One of the most common misconceptions is that Terms of Sale let you “set your own rules” about refunds, warranties, and liability. In Australia, that’s only partly true.

Terms of Sale are still a contract - but consumer law can override parts of your contract if they conflict with mandatory consumer rights.

You Usually Can’t Contract Out Of Consumer Guarantees

Under the ACL, consumers (and in some cases small businesses purchasing certain goods/services) can have automatic guarantees. These relate to things like acceptable quality, fitness for purpose, and services being provided with due care and skill.

What this means in practice is:

• your Terms of Sale can explain your process for handling refunds and defects, but
• your Terms shouldn’t try to remove or misrepresent a customer’s legal rights.

If your Terms say “no refunds under any circumstances,” you can create serious compliance risk - and also damage trust with customers.

Your Terms Should Avoid Misleading Statements

Overstating your rights (or understating your customer’s rights) can also raise misleading or deceptive conduct concerns. This can happen unintentionally, such as:

• stating a customer only has 7 days to report a fault (when consumer guarantees may apply longer)
• saying you “don’t offer refunds” without acknowledging ACL remedies for major failures
• claiming a warranty period is the only remedy available

This is why it’s important that your terms match how you actually operate and what the law requires, including the practical compliance principles behind misleading or deceptive conduct.

Unfair Contract Terms Are A Real Risk (Especially For Standard Form Terms)

If you use standard Terms of Sale (particularly for smaller customers) you should also consider the unfair contract terms regime. In simple terms, a clause may be problematic if it creates a significant imbalance, isn’t reasonably necessary to protect your legitimate interests, and would cause detriment if applied.

That doesn’t mean you can’t protect your business - it just means the protections should be proportionate and drafted in a way that makes sense for the type of transaction you’re doing.

How Do I Put Terms Of Sale In Place So They’re Enforceable?

Having well-written terms is only half the job. You also need a clear process so your Terms of Sale actually apply to the transaction.

In most disputes, the argument isn’t “what do the terms say?” - it’s “were those terms even part of the contract?”

Make Sure You Bring The Terms To The Customer’s Attention

How you do this depends on how you sell, but common approaches include:

• Online sales: linking the terms at checkout and requiring customers to tick an “I agree” box
• Quote-based work: attaching the terms to the quote and stating that acceptance is subject to those terms
• Invoice-based work: referencing the terms on the invoice and ensuring the customer had access to them before the sale was finalised
• Repeat B2B supply: onboarding customers with a credit application or account set-up process that incorporates the terms

Keep Your Sales Team And Operations Aligned

Terms of Sale work best when your day-to-day behaviour matches the contract. If your terms say “payment is due before delivery” but your team regularly ships before payment, the practical expectation can become murky.

A good internal process might include:

• a consistent quoting template
• invoice wording that matches your terms
• a clear policy for returns, defects, and complaints
• a script or checklist for common customer questions

Update Your Terms When Your Business Changes

Your Terms of Sale shouldn’t be a “set and forget” document. It’s worth revisiting them when you:

• start offering subscriptions or recurring billing
• expand into new states or ship internationally
• change suppliers, delivery models, or fulfilment methods
• launch new product lines with different risk profiles
• start selling to a different type of customer (B2C vs B2B)

If you want your Terms of Sale drafted to suit your sales process (and to align with Australian consumer law), having a dedicated Terms of Sale document is often the cleanest way to do it.

Key Takeaways

• Terms of Sale set the ground rules for payment, delivery, cancellations, returns, and disputes, so you’re not relying on informal conversations when things go wrong.
• They’re one of the most effective tools for protecting cashflow, especially when customers delay payment, dispute invoices, or try to cancel last-minute.
• Good Terms of Sale reduce misunderstandings by clearly defining what’s included in the price, how variations work, and what the customer is responsible for.
• Your Terms of Sale must work alongside Australian Consumer Law (ACL) - you generally can’t exclude consumer guarantees, and misleading “no refunds” wording can create legal risk.
• Enforceability isn’t just about wording; it also depends on your process (making sure customers actually see and accept the terms before the sale).
• As your business grows or changes (new products, subscriptions, new sales channels), it’s worth reviewing and updating your Terms so they stay fit for purpose.

If you’d like help putting Terms of Sale in place (or updating your current terms for 2026 and beyond), you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.