The basis of any sound business relationship between any business extending credit in any form to customers or clients, is a credit application form incorporating standard terms and conditions of trade. The purpose of this document is as a many faceted but the most important functions are:

  1. To enable you to properly assess who your potential client is, before you start trading with them;
  2. To incorporate securities, to protect you in the event of your customer defaulting;
  3. To set out with certainty your trading terms, payment periods and the consequences of non-payment;
  4. To limit your liability in the event of you or your product’s failure to perform.

In addition we have entered a period in the social development and history of our country in which the law, as reflected in court decisions and new legislation is developing a bias towards consumers and debtors. The result is that there is a changing landscape in credit management and it is vital that any business extending credit to customers is aware of these changes and has the most up-to-date and legally correct credit application and standard terms and conditions of trade.

In particular the introduction of the National Credit Act, has completely changed the legalities of credit granting, with the emphasis on individual consumer debtors, but most certainly extending into the field of commercial credit (that it is credit extended to other businesses).

The net result is that we will implore any business granting credit to use a sound good application form incorporating standard terms and conditions of trade. In addition in the event of you having a credit application form which has not been drafted with the National Credit Act in mind or the various other changes in the law that have happened in the last couple of years, now is the time for your credit application form to be revised and re-drafted.