Your Company’s Position in the Market
Documenting Customer Agreements
Depending on whether you sell aviation products or services, or both, as well as the size and/or volume you sell, you may or may not have written contracts with your customers. In fact, you may have agreements or contracts for some of your sales, and not for others.
For example, many smaller MROs will repair aircraft on a handshake because “it’s always been done that way.” At some FBOs, fuel sales take place in much the same way.
What are the Advantages?
Having a standard agreement in place with your customers can have many benefits. Here are a few key items that can be included:
- Defining exactly what you provide and is expected of you.
- Listing the costs and rates at which changes or additions will be billed at.
- For services:
- When you will get started;
- When you expect to finish; and
- Conditions that could change the timeline (like receiving timely approvals from the customer for work to be done, or receipt of parts or information).
- Defining limitations such as:
- How long the work will be warranted for;
- Under what conditions warranties will not apply; and
- Actions or events that terminate any warranties.
- Identifying the jurisdiction in which any arising issues must be litigated in (this may especially relevant for MROs and/or FBOs when the aircraft or owner is based elsewhere)
For some aviation businesses, it may be possible to just reference “our standard sales agreement terms as posted in our office and available by request,” on your invoice, but this is something you will want to discuss with your legal counsel and consider depending on the products and services you provide.
Biggest Benefit
But the best part is that having a written agreement or contract in place is one more piece of building value in your aviation company. The more organized you are, the more clearly defined things are, the more known expectations are, the greater the comfort level an investor, a potential buyer, or a bank considering loaning your company money or extending a line of credit can gain. And that means you gain.
