• Commercial Law

    Commercial Law

    We are business people as much as we are lawyers. We will take care of the legal documents so you can confidently run your business.
    As your business grows, its risk profile and governance challenges will change. We partner with our clients over the long term to ensure they are in the driver’s seat for success.

  • Dispute Resolution

    Dispute Resolution

    We are in your corner when the going gets tough. Having resolved over 6,500 disputes for business owners have seen it all before.

    Whether you need a skilled negotiator or a fearless litigator, we specialise in delivering commercial results when:

    Customers refuse to pay;
    Suppliers let you down; and
    Business Partners do the wrong thing.

  • Employment & Safety

    Employment & Safety

    The biggest challenge for any business owner, is managing their employees.

    A difficult employee can make you question why you got into business in the first place and be toxic to your team morale.

    We deliver proactive solutions to manage your team via employment contracts, policies and procedures as well as handling employment disputes when they arise.

  • Property & Construction

    Property & Construction

    Property is the key most wealth in Australia.  Whether you are buying, selling, leasing or developing property, you need a lawyer you can count on.

    We can advise on the whole property development process from obtaining finance to development approvals, construction and sale or leasing.

    We also act for the Master Builders Victoria and have extensive expertise in construction contracts and disputes.

  • Family Law

    Family Law

    At Taurus Legal Management we understand the unique challenges clients encounter during family disputes, especially when children are involved. Our family lawyers specialise in handling high-asset cases with a focus on protecting clients wealth, securing their family’s future, and safeguarding the best interests of their children.


Payment terms are common for all businesses, whether you are the buyer or the seller. Getting them right is critical.

Internal and external payment terms affect your cash flow. You need to understand the payment terms of your suppliers and ensure that your own customers meet their payment obligations to you.

Failing to comply with payment terms can result in time-consuming and costly legal proceedings.

Back to basics: what are payment terms?

A quick refresher – payment terms are the rules that apply to the purchase of goods or services. These terms can take various forms, but in short, they specify when and how a buyer is to make payment. Payment terms may be agreed in a quote, terms and conditions, a long-form contract or reiterated in an invoice. By agreeing to purchase goods or services, you are accepting the payment terms of the seller.

Generally, payment terms will include:

  • The purchase price;
  • Whether payment is to be made in instalments or in a single lump sum;
  • How payment is to be made;
  • Timing for when payment is due; and
  • Consequences that will be triggered if the buyer fails to pay or makes payment late.

 Failing to comply with payment terms

Failing to comply with payment terms may lead to a seller taking legal action to recover the debt owing.

Non-compliance with payment terms can also result in default interest being added to the debt. Default interest will typically range anywhere between 10-18% per annum. However, we have seen some suppliers trying to charge interest of 40%.

We also commonly see  a condition which requires the buyer to pay the seller’s costs in recovering the debt . This means that all legal costs incurred in chasing payment are added on top of the original debt.

Strong default terms, like the ones mentioned above, can result in the debt being doubled (or more)!

Negotiating Payment Terms

The most common mistake we see is payment terms being negotiated after payment has defaulted. This is a mistake because all leverage has been lost. Always ask yourself “why would the other side agree? What is in it for them?”

Negotiations which are most likely to be successful include:

  1. Extending the time for making payment because you are committing to larger or more expensive orders;
  2. Offering to pay by instalments. The larger the first instalment and the faster the instalments are to be paid in full, the more likely your proposal will be accepted;
  3. Offering to pay a higher rate in exchange for more time to make payment;
  4. Offering more security in exchange for payment. For example, signing a personal guarantee;
  5. Providing impartial documents to support your financial position. For example, if you are waiting on a large payment from one of your clients, you should consider whether you can provide a copy of that correspondence to your supplier. This will help to show that your reasons are genuine and help to build trust.

Last word

Make sure that negotiations and agreed amendments are documented. If a written contract exists, then amendments should be applied to that contract. If a formal amendment isn’t made, the next best option is to have it agreed in writing. If that isn’t possible, then make sure to keep a clear note of the conversation.

If you would like assistance with drafting or negotiating payment terms, enforcing or responding to a debt recovery action, please one of our expert lawyers at Taurus Legal Management on (03) 9481 2000 or info@tauruslawyers.com.au.

Posted by Taurus Legal Management