This is the one question all business owners ask about protecting themselves

- December 16, 2019 3 MIN READ

To be able to rely on your terms to protect your business, you will need to be able to show some evidence that your customer read your terms and actually agreed, writes Vanessa Emilio.

“Do I need to have customers actively agree to my terms?”

Great question! If something goes wrong, how can you prove your customer agreed to your terms without a signature on an agreement? How can you be sure or show that they have even read your terms and conditions? To be able to rely on your terms to protect your business, you will need to be able to show some evidence that your customer read your terms and actually agreed. 

There are a number of ways you can do this. Here are different options for levels of protection you can choose, from top to bottom:

1. Level 1: Signed Agreement. An original agreement with a physical signature is the strongest evidence of any terms agreed to by your customer. However, a full agreement or long set of terms may be considered ‘overkill’ for some products or services and may be a ‘barrier’ for customers to purchase. Depending on your specific products or services, and considering the costs of your products and risks for your business, this may not be the best option for you.

2. Level 2: E-Signature. An agreement that is signed by e-signature or email acceptance is the next best protection to a physical signature and evidence of customer agreement to your terms. Again, it may be a lot of effort for a customer to agree or e-sign an agreement if they are only making a small or inexpensive purchase so you need to decide if this is right for your business.

3. Level 3: Tick Box. Terms that are signed by tick box can be a great way to get customers to actively and easily agree to your terms of sale. It is becoming a more common way to have customers agree and provides protection for your business at the same time. It is legally binding in most cases, as a way to show that customers agreed. The difficulty can be proving that they actually read your terms. This can be an issue, for example, if the tick box agreement is required in order to purchase and there is no link to your terms at the same time. Customers may argue that they just ticked to purchase and did not read your terms. This method of agreement can provide less protection for that reason. If you are selling more expensive, higher risk products or have special terms required for your products or services, this may not be the right option for your business.

4. Level 4: Purchase Statement. Including a statement that says: ‘By going ahead and purchasing our products/services, you are hereby agreeing to our Terms’ carries the least amount of protection as there is no ‘active agreement’ by your customer. It is even more difficult to be able to show they read or agreed to your terms just because they made a purchase from your business.

5. Level 5: Posting your Terms on your Website. Just because a customer came to your website and purchased your products or services, does not mean they agreed to your terms. It is may be difficult to prove or argue that the customer even read your terms, let alone agreed! This option provides the least protection for your business.

When deciding on options for your term and level of risk appetite, you need to balance up the commerciality of having your customers actively agree to your terms versus protecting yourself and your business. You may decide that the risk of relying on terms for any customer issues to your business is minimal so the need for customers to physically agree to your terms is less important.

You can always test the various options, by asking your family and friends what they would agree and what would be a barrier to their purchase. The end of the year is a great time to review your business and update your terms and processes for the new year ahead!