Payment Terms and Contract Review Checklist
Most payment disputes trace back to weak terms: review your contracts so the price, payment timing, ownership of goods, interest, and dispute steps are all clear and enforceable before the next invoice goes out.
What this checklist covers
- Review whether your payment terms are clear and complete
- Check ownership, security and interest provisions
- Ensure terms are properly incorporated into the contract
- Align terms with how you actually invoice and collect
- Identify gaps to fix before the next dispute
6 min
Before you start
Strong terms prevent disputes; weak ones cause them. Before reviewing, gather your standard contract, quote template, purchase-order process and current invoice wording, and note where customers most often push back. The aim is terms that are clear, fair and actually part of the deal.
- Collect your contract, quote and invoice templates.
- Note the payment terms you actually apply in practice.
- Identify where customers commonly dispute or delay.
- Check how your terms are presented to and accepted by customers.
This is general information only and not legal advice. Contract terms, unfair-contract-term rules and consumer protections are technical — have your terms reviewed by a professional.
Review the core terms
- Price, GST treatment, and what is and is not included.
- Payment timing — due dates, deposits, and progress or milestone payments.
- What happens on late payment, including any interest or recovery-cost provisions.
- Retention of title, so ownership stays with you until you are paid.
- A clear dispute process and how disputes must be raised.
- Suspension or stop-supply rights if the account falls overdue.
Each of these closes a common gap that customers exploit. Vague or missing terms on timing, ownership and late payment are exactly where disputes start, so make them explicit.
Make the terms stick
- Ensure customers actually agree to your terms before work starts, not after.
- Reference the terms consistently on quotes, orders and invoices.
- Check that any retention-of-title clause is supported by a PPSR registration where appropriate.
- Review terms against unfair-contract-term and consumer-protection rules.
- Update templates so they match your real invoicing and collection practice.
The best clause is worthless if it was never part of the contract or is unenforceable. Getting acceptance up front, and aligning paperwork with practice, is what turns good terms into real protection.
Common mistakes
- Burying payment terms where the customer never sees or accepts them.
- Omitting retention of title, leaving you unsecured if the customer fails.
- Including interest or penalty clauses that may be unenforceable.
- Letting invoice wording contradict the underlying contract.
- Never reviewing terms against current unfair-contract-term rules.
Once your terms are tighter, recovery is easier too. A free debt appraisal can show how enforceable a particular debt looks under your current terms.
Key takeaways
- Make price, timing, ownership and late-payment terms explicit.
- Get customers to accept your terms before work begins.
- Support retention of title with a PPSR registration where appropriate.
- Have terms reviewed against unfair-contract-term and consumer rules.
Frequently asked questions
Can I charge interest on overdue invoices?
You may be able to if your contract clearly provides for it, but interest and penalty clauses can be unenforceable if unreasonable. Have the wording reviewed before relying on it.
Why include a retention-of-title clause?
It can keep ownership of goods with you until payment, improving your position if the customer fails. To be effective it often needs a PPSR registration, so take advice on doing it properly.
Do my terms apply if the customer never signed them?
Terms generally need to be properly incorporated and accepted to bind the customer. Presenting and getting agreement to them before work starts is far safer than relying on fine print after the fact.
Work the checklist, then get paid
Use the free Invoice Generator, then let Merion recover anything that goes unpaid — commission-only.