Agreement For Supply Of Goods On Credit Template for New Zealand

An Agreement For Supply Of Goods On Credit creates a formal framework for businesses to trade where goods are delivered before payment is received. This contract establishes the terms under which your company can supply products to customers on credit, protecting your interests while maintaining commercial relationships. In New Zealand, these agreements must comply with specific legislation governing credit arrangements and consumer protection.

When do you need this document?

You need this agreement when establishing ongoing trading relationships with business customers who require credit facilities. It's essential for manufacturers, wholesalers, and distributors who supply goods to retailers, other businesses, or commercial customers on payment terms extending beyond immediate settlement. The document becomes particularly important when your credit exposure exceeds your risk tolerance or when you need formal security arrangements to protect against default. Many businesses use these agreements to replace informal credit arrangements with legally enforceable contracts that clearly define responsibilities and remedies.

Key legal considerations

The agreement must include comprehensive credit terms, including payment periods, interest rates, and default provisions. Security arrangements are crucial - you should consider whether to require personal guarantees from directors, security interests over goods supplied, or other forms of collateral. Payment terms must be clearly defined, including consequences for late payment and your rights to suspend supply. The contract should address delivery terms, risk allocation, and acceptance procedures to avoid disputes. Consider including retention of title clauses to maintain ownership until payment is received, and ensure dispute resolution procedures are clearly established. Credit assessment provisions should outline your right to review and adjust credit limits based on the customer's financial position.

Legal requirements in New Zealand

New Zealand's Contract and Commercial Law Act 2017 governs the formation and enforcement of your supply agreement, requiring clear terms and fair dealing obligations. The Personal Property Securities Act 1999 is critical if you're taking security interests over goods or requiring collateral - you must register security interests to establish priority rights. The Credit Contracts and Consumer Finance Act 2003 applies to credit arrangements, mandating specific disclosure requirements and consumer protections where applicable. You must comply with Fair Trading Act 1986 requirements regarding representations about goods and credit terms, ensuring all statements are accurate and not misleading. The Consumer Guarantees Act 1993 provides statutory guarantees that cannot be excluded in consumer transactions, though these can be modified for business-to-business arrangements where goods are acquired for business purposes.