Terms & Conditions: The Essential Guide And Why You (Yes, You) Need One
Welcome to the wild world of running a business. The land of invoices, late payments, cancelled jobs, customers who suddenly “aren’t happy anymore,” and that one client who swears the email never arrived.
Whether you’re offering a service or simply selling something online, sooner or later, you’re going to need a guardrail. That guardrail is the humble but powerful Terms and Conditions.
Here at Debt Free, we’ve seen it all, from unpaid invoices and asset-stripped companies to directors vanishing into thin air faster than last night’s takeaways.
And we’ve also seen what happens when businesses get their contracts right.
What Are Terms & Conditions, Anyway?
Terms and Conditions are a legal agreement between you and your customers or clients. They set out the rules for how your services are used, what you promise (or don’t promise), and what happens if things go off the rails. In short, they define the rules.
They also enforce and protect your intellectual property, limit your liability, and clarify both your obligations and those of your customers.
Terms and Conditions are the operating manual for your business and define:
- When you get paid
- What happens if you don’t
- Whether you can charge costs and interest
- Who pays legal costs
- How disputes are handled
- Who owns what
- What rights you have when things go wrong
They set the rules before emotions arrive. Without them, you rely on:
verbal promises, implied agreements, and …hope.
Without Terms and Conditions, you’re relying on good faith and crossed fingers. And we can tell you from experience, hope is not a successful collection strategy.
Why Every Business Needs Terms & Conditions (Yesterday)
Let’s be blunt. Without enforceable Terms and Conditions:
- You are unsecured
- You have less leverage
- You carry unnecessary risk
- You chase debts longer
- You recover less money
- You lose negotiating power
- You become vulnerable to insolvency losses
With properly drafted Terms and Conditions:
- You control payment terms
- You protect your cashflow
- You improve collection success
- You reduce disputes
- You increase recovery rates
- You strengthen your legal position
In short, your Terms and Conditions determine whether you operate like a business… or like a financial charity or interest-free financier.
What We See When Businesses Don’t Have Terms and Conditions.
Every week we hear:
“They went into liquidation.”
“They’re disputing it now.”
“They are disputing the collection costs.”
“They won’t pay legal costs.”
“They’ve sold everything.”
“The director disappeared.”
“The trust owns the assets.”
“We can’t do anything quickly.”
In most cases, it’s the lack of enforceable paperwork.
Terms and Conditions must be in place before problems arise. Not while you’re chasing money or after a liquidation. Not once lawyers appear. You don’t install sprinklers after the fire.
“But We’ve Always Done It This Way…”
This is one of the most expensive sentences in business history. Just because someone paid you in the past does not mean they’ll pay you in the future. Repeat that.
Your best customer today can:
- go broke tomorrow,
- lose financing overnight,
- face legal action,
- fold their company,
- restructure,
- transfer assets,
- or simply decide you are now optional to pay.
Terms and Conditions don’t create distrust. They create certainty. They protect relationships by preventing misunderstandings before they start.
Why Good T&Cs Change Behaviour Instantly
Debtors behave differently when:
- personal liability exists
- interest applies
- legal costs are enforceable
- security interests exist
- directors are exposed
- trust property is reachable
When paperwork is weak, delays multiply. When paperwork is strong, payments happen faster. Simple.
Why Debt Free Terms & Conditions Are Different… Guaranteed.
We don’t build “Standard Terms and Conditions”. We build bespoke protection. We draft guaranteed, enforceable Terms and Conditions to get paid. Our documents are backed by the best lawyers in New Zealand and are designed specifically for:
- Debt recovery
- Insolvency risk
- Asset protection
- PPSR enforcement
- Director accountability
- Cost recovery
- Contract certainty
- Dispute prevention
Everything is written for what happens when things go wrong. Because that’s when contracts matter.
Final Thought
Running a business is not for the faint-hearted. Some days, things flow perfectly. Other days, jobs are suddenly “disputed”, payments are “being processed next week (fingers crossed)”, and customers who were friendly last week are now impossible to reach.
That’s the reality of business.
And it’s precisely why expanding on hope, handshakes, and good intentions is not a strategy; it’s a gamble.
Your Terms and Conditions are the guardrail that stops your business from going over the edge when things get messy. They are the structure that holds when relationships strain, cashflow tightens, and excuses multiply.
When Terms and Conditions are correctly written, disputes shrink. Payments happen faster. Risk reduces. Leverage increases.
At Debt Free, we’ve seen both sides of this story. We’ve watched poor paperwork burn strong businesses. And we’ve seen solid contracts turn difficult situations into fast recoveries.
And when the day comes that someone decides not to pay you, and it will, you’ll be very glad you took the time to protect yourself.
Because Terms and Conditions doesn’t stop problems entirely… but it does make them solvable.
Mark Mclachlan
