- When a supplier and a business customer transact without agreed terms, the deal isn't governed by nothing — it's governed by whatever combination of default statutory rules, prior…
- A solid set of B2B terms of sale is usually one or two pages, written in plain language, and covers the following: A short checklist before you finalize your terms - [ ] Terms are…
- Having well-drafted terms only helps if they legally form part of the contract.
If your Ontario business sells products or services to other businesses, you probably have a quote template, an order form, or an invoice. What many suppliers don't have is a set of standard terms of sale attached to those documents — the fine print that says what happens when a customer pays late, disputes a delivery, or wants to return goods. Without it, general contract law and default statutory rules fill the gap, and they don't always favour the seller.
Standard terms of sale are not a substitute for a full negotiated contract on a large or complex deal. But for the everyday flow of quotes, purchase orders, and invoices that make up most B2B sales, a well-drafted set of terms is one of the most cost-effective pieces of legal paperwork a business can have.
Why "No Written Terms" Is a Choice, Not Neutral Ground
When a supplier and a business customer transact without agreed terms, the deal isn't governed by nothing — it's governed by whatever combination of default statutory rules, prior dealings between the parties, and general contract principles a court decides applies after the fact. That can include implied warranties about the quality of goods sold, uncertain rules about when risk passes to the buyer, and no agreed mechanism for resolving a dispute.
Worse, if your customer sends you their own purchase order with their terms printed on the back, and you simply ship the goods, you may end up bound by the customer's terms rather than yours — a problem sometimes called the "battle of the forms." Putting your own terms in front of the customer, and getting them to accept those terms before the deal is finalized, is how a seller keeps control of that outcome.
What to Put in Standard Terms of Sale
A solid set of B2B terms of sale is usually one or two pages, written in plain language, and covers the following:
| Clause | What it does |
|---|---|
| Price and payment terms | States price, currency, when payment is due, and accepted payment methods |
| Late payment consequences | Sets what happens if an invoice isn't paid on time (see our related article on interest clauses) |
| Delivery and risk of loss | Specifies when the goods are considered delivered and when risk passes to the buyer |
| Title / retention of title | States when ownership of goods transfers — sometimes withheld until payment is received in full |
| Returns and inspection window | Sets a defined period for the buyer to inspect and reject nonconforming goods |
| Warranty and disclaimer language | Describes what warranties the seller does and does not make |
| Limitation of liability | Caps the seller's exposure for indirect or consequential losses |
| Force majeure | Addresses delays caused by events outside either party's control |
| Governing law and dispute resolution | Confirms Ontario law applies and how disputes get resolved |
A short checklist before you finalize your terms
- [ ] Terms are referenced clearly on every quote, order confirmation, and invoice — not buried in an email signature
- [ ] The customer has a genuine opportunity to see the terms before or at the time of order, not after
- [ ] Payment terms and any late-payment consequences are stated in specific, unambiguous language
- [ ] Warranty language is consistent with what your sales team actually promises verbally
- [ ] Liability limits and exclusions are reviewed by a lawyer — some exclusions won't be enforceable in every circumstance
- [ ] The terms are reviewed periodically as your product line, pricing model, or customer base changes
Getting Your Terms Actually Incorporated Into the Deal
Having well-drafted terms only helps if they legally form part of the contract. A few practical points:
- Reference the terms on every commercial document — quotes, order acknowledgments, and invoices should all point to the same current version of your terms, ideally with a link or an attached copy.
- Get acceptance before or at the point of sale. Terms that only appear on a document sent after the deal is already agreed (like an invoice mailed weeks later) are much weaker evidence that the customer agreed to them.
- Keep a version history. If your terms change over time, keep records of which version applied to which sale — this matters if a dispute arises later about an older transaction.
- Watch for conflicting customer paperwork. If a repeat customer always sends a purchase order with its own terms, address this directly — either by negotiating a master agreement that overrides both parties' standard forms, or by clearly rejecting the customer's terms in your acknowledgment.
Frequently asked questions
Do I need a lawyer to write terms of sale, or can I use a template?
A generic template is a reasonable starting point, but it should be adapted to your actual products, delivery methods, and risk profile. Terms that don't match how your business really operates can create more confusion than having none — a lawyer can tailor a template to your specific sales process.
Can my terms of sale override rules that automatically apply to a sale of goods?
Some default rules can be modified or excluded by agreement, and some cannot. Whether a particular exclusion holds up depends on the wording used and the nature of the transaction — this is a nuanced area you should have reviewed rather than assume from a downloaded template.
Do standard terms of sale need to be signed?
Not necessarily. Terms can be validly incorporated by clear reference and the customer's conduct (such as placing an order after being shown the terms), though a signature or explicit click-to-accept step gives you stronger evidence of agreement if a dispute ever arises.
How often should I update my terms of sale?
Review them at least once a year, and any time your pricing structure, delivery method, product warranties, or customer base changes materially. Terms that no longer match how you actually do business are a liability, not a protection.
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