Well written, easy to understand and easy to find terms and conditions ensure your customers know the basis on which you are selling anything to them. In addition, you need to ensure your customers have read and agreed to your terms for them to be legally binding.
In reality, not many business owners know if their terms of service are read by customers or even if they can rely on their own terms to protect them. So how do you get online customers to read and agree to your business terms without them physically signing?
Here are 3 of our Legal123 ‘Don’ts’ for posting terms and conditions on your website:
Don’t #1: Make your terms and conditions (T&Cs) too complicated or long
Apple iTunes terms are longer than a Shakespeare play and it is arguable whether they are legally binding at all because of the length. At 56 pages, it would be legally difficult to argue that anyone actively agreeing the terms really read, understood or otherwise can be expected to be held to these terms for an under $5 purchase.
Don’t #2: Bury your T&C’s
Hiding them on a page that is difficult to access or not obvious leaves a great opening for customers to state they could not find and have not read your terms, let alone to have agreed to them.
Don’t #3: Not abiding by your own terms
A lot of business owners have never read or do not know what their obligations are under consumer law or even under their own terms. You have legal obligations as a business owner, guarantees and who knows what else may be in your terms! Make sure you read, understand and keep your terms updated.
As a business owner it’s important to understand what the options are for binding customers to your terms of service, so here are the 3 Dos:
Do #1: Tickbox, Active Agreement (most protection):
This includes email agreement which is also considered active agreement. Having active agreement provides the most protection for business owners so if you sell expensive items, or high risk products or services, you should really consider having customers actively agree to your terms. Some business owners believe they will sell less or think this is a barrier to sales but you need to weigh up the cost/risk/benefit of having terms agreed versus non-agreement and make a commercial decision.
Do #2: You Pay, You Agree (less but still some protection):
The “you buy our products or services then you agree” approach in your terms, leaves open the potential argument that they did not read your terms nor were they brought to their attention so they didn’t agree.
Do #3: Posting Terms only (taking the most chance):
If you choose to post terms ‘somewhere’ on your site with no way of knowing if they are read, it may be difficult to prove the terms have actually been read and agreed. You may think it is the most commercial way to do business as this provides less barrier to potential sales but you are taking the risk that customers have not agreed to your terms.
Not many purchasers read terms and conditions it seems, especially if they are long, complicated or if their purchase is small but generally the more expensive the purchase, the more likely customers are to read your terms and conditions.
So make sure they are binding, protect you (especially if you are a sole trader!) and are clear for your customers to understand both what you are offering and what to do if anything goes wrong.
Have you checked your business terms of service lately? Would you agree to them? This is a great time to update them.