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Dear Leonie B

The advice from Paul Reynolds explains how to form a binding contract. Obviously you would want to make sure that your T&C’s covered what he identified in his post.

In response to your other questions –

1. Are there any compulsory sections which must be included in a website’s terms & conditions?
There are no compulsory sections which must be included in T&C’s as such. The only term that is probably absolutely necessary is a Governing Law Clause. An example of such a clause would be:

Governing law
All disputes regarding this Agreement shall be governed by the laws of the New South Wales. The parties agree that the Courts of New South Wales shall have jurisdiction over any legal disputes arising from this Agreement.

You need to include this in your T&C’s so you know where you have to go to court if you have a dispute.

There are also some things which you are not permitted to exclude in your T&C’s – for example statutory warranties under the Trade Practices Act 1974 (eg right to a refund for a faulty good) cannot be excluded in T&C’s. There are significant penalties for excluding statutory warranties from T&C’s.

2. If you DIY, must it be “signed off” by a solicitor or lawyer? Will it still be viewed as a binding contract if it was not signed off by a legal professional?
You don’t have to have your T&C’s signed off by a lawyer. The contract will be binding as long as you have the essential elements of a contract – offer, acceptance, and consideration.

3. If you have a list of prohibited or restricted items which you do not want sellers to list on the website, would this typically form part of the terms & conditions, or should that be separate?
I am not too sure what you mean by this question. If you don’t want a seller to list something on your site, it would go into the T&C’s but you should also draw it to the attention of the seller in other ways. A good idea would be to look at the way ebay advise their sellers about prohibited goods.

4. What are the big Do’s and Don’ts for website’s terms & conditions?
I think the main “Do” with T&C’s is to first look at the T&C’s of your major “reputable” competitor. That company’s T&C’s should provide you with a good guide to what you should have include in your own T&C’s.
The main “Don’t” is to writing your T&C’s in legalese but rather in plain English. You want the T&C’s to be clear and be easily understood, particularly if you may have to enforce some of its terms in the future. Often traders use complicated language and include unnecessary terms in their T&C’s – for example have a look at this Force majeure clause –

Force majeure.
Neither party shall be responsible to the other for delay or failure in performance of any of the obligations imposed by this agreement, provided that such failure shall be occasioned by fire, flood, explosion, lightning, windstorm, earthquake, subsidence of soil, failure of machinery or equipment or supply of materials, discontinuity in the supply of power, or governmental interference, civil commotion, riot, war, strikes, labor disturbances, transportation difficulties, labor shortage, natural genetic variations of any living matter or by any cause of like or unlike nature beyond the reasonable control and without the fault or negligence of such party.

WHAT?

I hope the above helps.

Michael Terceiro
Solo Lawyer
http://www.terceiro.com.au