Terms and Conditions of Sale for Goods is a legally binding contract between a seller and a buyer that sets out the terms on which goods are sold in Australia. It covers essential commercial terms such as pricing, payment, delivery, risk and title transfer, and the seller's obligations under Australian Consumer Law. In Australia, these terms must be consistent with the mandatory consumer guarantees imposed by the Australian Consumer Law (ACL), which is Schedule 2 of the Competition and Consumer Act 2010 (Cth).

The ACL represents one of the most comprehensive consumer protection frameworks in the world. It applies to all sales of goods and services to consumers in Australia, regardless of what any contract says. This means that even a carefully drafted set of Terms of Sale cannot override the nine consumer guarantees that the ACL implies into every consumer transaction. Unlike many overseas jurisdictions, the ACL makes it illegal — not merely unenforceable — to include a term in a contract of sale that purports to exclude or limit a consumer guarantee. The ACCC actively investigates and prosecutes businesses that include such terms.

The nine ACL consumer guarantees for goods include: acceptable quality (section 54), fitness for any particular disclosed purpose (section 55), match with description (section 56), match with sample or demonstration model (section 57), compliance with express warranties (section 59), clear title (section 51), undisturbed possession (section 52), freedom from undisclosed securities (section 53), and availability of repairs and spare parts (section 58).

A key distinction in Australian consumer law is the difference between a major failure and a minor failure. For a major failure, the consumer has the right to choose their remedy — including a full refund. For a minor failure, the supplier has the right to choose whether to repair, replace, or refund. Terms of Sale must accurately reflect these rights and must not mislead consumers about what they are entitled to under the ACL.

In addition to ACL compliance, sellers supplying goods on credit or payment terms need to be aware of the Personal Property Securities Act 2009 (Cth), which governs retention of title clauses and requires registration on the Personal Property Securities Register to protect the seller's security interest in goods not yet paid for.

You need Terms and Conditions of Sale for Goods whenever you supply goods to customers in the course of a business in Australia — whether you sell online, through a physical store, via catalogue, or through wholesale channels.

For e-commerce businesses, Terms of Sale are essential and must be accessible before the customer places an order. The ACCC's guidance on online sales makes clear that terms must be prominently displayed and that the purchase process must not mislead consumers about their rights. For online sales, the ACL's consumer guarantees apply in full, and the seller must have a clear process for handling returns and refund claims.

For B2B (business-to-business) transactions, the position is more nuanced. The ACL consumer guarantees apply only to 'consumers' — generally, individuals or small businesses acquiring goods for personal use or for use in a business, where the price does not exceed $100,000 (or the goods are of a kind ordinarily acquired for personal, domestic, or household use). For transactions above this threshold between businesses, the parties have more freedom to negotiate the allocation of risk, subject to the prohibition on unfair contract terms in Part 2-3 of the ACL.

Terms of Sale are also essential for businesses offering payment terms (credit), as they provide the contractual basis for the payment obligation and, if properly structured, create a security interest in the goods that can be registered on the Personal Property Securities Register under the Personal Property Securities Act 2009 (Cth).

For businesses offering voluntary warranties in addition to the mandatory ACL consumer guarantees, the Terms of Sale should clearly describe the voluntary warranty, its duration, and what it covers, while making clear that it does not reduce or replace the consumer's statutory rights under the ACL.

A well-drafted Australian Terms and Conditions of Sale for Goods should include the following key elements to provide legal protection and comply with Australian law.

The consumer guarantees clause is the most critical element of any Australian Terms of Sale. It must acknowledge the nine ACL consumer guarantees, explain the distinction between major and minor failures, and accurately describe the remedies available to consumers. It must not contain any provision that purports to exclude or limit a consumer guarantee, and must not mislead consumers about their statutory rights.

The pricing and GST clause must clearly state whether prices are displayed inclusive or exclusive of GST, in compliance with the A New Tax System (Goods and Services Tax) Act 1999 (Cth) and the ACL's requirement for transparent pricing. For most consumer-facing businesses, GST-inclusive pricing is required or strongly recommended.

The delivery clause should state the estimated delivery timeframe and acknowledge that, under section 62 of the ACL, goods must be delivered within any agreed time or, if no time is agreed, within a reasonable time. The clause must not exclude liability for failure to deliver within a reasonable time.

The risk and title transfer clause is important for managing commercial risk. Risk typically passes on delivery, while title may be retained by the seller until full payment under a retention of title clause. If you include a retention of title clause, you should also include a reference to the Personal Property Securities Act 2009 (Cth) and the need for PPSR registration.

The limitation of liability clause must operate within the bounds of the ACL. It can limit remedies for non-major failures to repair, replacement, or refund of the goods, as permitted by section 64A of the ACL, but cannot exclude liability for major failures or for consumer guarantees that cannot be excluded.