When purchases are small,

  • Buyers do not usually require an agreement with their sellers.
  • Acceptance of the goods or service by the buyer is usually sufficient authorisation for the seller to debit the buyer's account.

When purchases are larger

  • it is not good practice for buyers to allow sellers to debit their accounts without authorisation.
  • Buyers should establish agreements with their sellers before a sale takes place.
  • An agreement should consider what amount will be debited after delivery and what constitutes authorisation for the seller to debit the buyer's account.
  • In many instances it is not possible for sellers to give a firm price, especially when providing services at an hourly rate (e.g. building work, mechanical repairs).
  • In such cases the traders need to agree what will happen if the price is too high or what to do if it appears that the price will be beyond expectation.
  • The agreement should also state how the buyer will authorise the buyer to enter the trade (i.e. debit the buyer's account).
  • It should further consider how the trading parties will resolve a dispute or if the buyer is dissatisfied with the goods or service.

Trading Agreements

  • Can be verbal or written.
  • Buyer can send seller an order
  • Seller can send the buyer an invoice indicating the price for the goods or service provided.
  • If the buyer is in agreement with the price and satisfied with what has been received, the buyer should senda Trading Slip to the seller.
  • A trading slip is an authorisation for the seller to enter the trade. It is the buyer's acknowledgement of receipt, token of satisfaction and signal to the seller that the trade may be entered.
  • The seller should not enter the trade until the Trading Slip has been received.
  • Blank Invoices and Trading Slips are available online when members are logged in.

Summary: As buyers' accounts are debited by sellers, buyers should establish agreements with their sellers regarding when their accounts may be debited if they feel there might arise a dispute over the amount debited or there might be dissatisfaction with the goods or service provided.

(From CES Concepts manual)