A guide to website Terms and Conditions
What are they, who needs them, who can create them, and what should they cover? Here’s your essential guide to website Terms and Conditions.
Website Terms and Conditions are essentially your ‘contract’ with the customer. They govern the terms upon which you conduct your online business and provide protection for any claims against you.
As a rule of thumb, if you sell goods or services, or have a specialist website that provides advice (financial, medical, fitness, food and diet, for example), you need terms and conditions to protect you and your business.
I recommend business owners engage a lawyer to create their Terms and Conditions. While no one’s stopping you from creating your own, you risk them not being up-to-date with the latest law (for example, Australian Consumer Law provisions), they may not relate to your actual online business and worse, they may not protect you at all.
Many micro-business owners may hesitate to have a lawyer create their Terms due to perceived costs, but you’d be surprised how affordable they actually are.
Website Terms and Conditions must include the following elements.
Customer returns and guarantees
If you sell products or services online you MUST have Terms and Conditions that comply with the latest Australian Consumer Law. The Australian Competition and Consumer Commission (ACCC) check websites and issue penalties if they’re non-compliant.
"Strongly worded Terms may dissuade visitors from suing and may make them think twice about how they use the information (on your website)."
The latest Australian Consumer Law stipulates that you must include the following details in your website terms and conditions:
- A statement that you comply with Australian Consumer Law
- How you will provide a refund, repair or replacement of faulty products
- Details of your guarantee
- Details of any warranty (if you provide one, which is not obligatory)
Remember, you cannot have a blanket “no refunds” policy. You are required by law to guarantee your goods and services against faults or if they do not perform as advertised.
Use (or misuse) of information on your website
The aim of your website is to help people – whether it’s by selling something, offering advice or suggesting a solution to their problem. But you can’t be sure that your advice, information or solution will work for everyone. And you can’t foresee all the ways a visitor could use your website’s information, including where they may do so to their detriment.
For this reason it is sensible to include a disclaimer in your website Terms and Conditions that protects you against use (or misuse) of information on your website – as a preventative measure.
For example, if a visitor uses or relies on information from your site and suffers loss, they may try to claim from you and your business. Strongly worded Terms may dissuade them from suing and may make them think twice about how they use the information.
Want more articles like this? Check out the business startup section.
Your Terms should also include statements that protect your business, ideas, and even your website design from being copied. Copyright law states that your “work” has protection immediately upon its creation, but a statement in your Terms will help to confirm this and protect you further. This is an additional protection, along with Copyright registration, that you should consider for your online business.
High (or higher) risk businesses
Some businesses are, by their very nature, higher risk. Fitness advice, supplements, pharmaceuticals, health, diet, food, financial advice, etc. All of these have higher risks than, say, selling stationery or books.
If your online business has specialist risks, you should include a disclaimer specific to your business in your Terms and Conditions. This should limit claims to you for possible injuries, losses, etc. which may arise from using or consuming any of your products.
Limit your liability
Lastly, and possibly the most important clause you need to include in your Terms, is one that limits the amount of your liability for any claims anyone may make against you or your business. In most circumstances, this means that a claimant may not claim for more than an amount you have stated (and they have agreed) in your Terms. You cannot fully prevent someone from making a claim against you but you can limit your liability for any such claim.
For example, you could limit the amount of any damages claimed to the amount the buyer originally spent with you. If a product they bought from you broke, for example, and damaged another item it was sitting on in their home, you could not have foreseen this and should not be liable. By limiting your liability to the purchase price, in effect you are refunding their purchase only and stopping the buyer from claiming any more from you for things you could never have anticipated.
Website Terms and Conditions are there to protect you and your business. You can never completely control whether or not you are sued – no matter how careful you are or how strict or strong your Terms may be. But you should at least try to mitigate any claims that may arise against you and dissuade claims which are not any fault of you, your products or services. And without clear Terms and Conditions, you may be open to claims and open to potentially unlimited damages.
So if you don’t have Terms and Conditions on your website and you’re selling online, get compliant and put them online as soon as possible. If you have them already, review them to make sure you’re covered for the above risks.
Have you got Terms and Conditions for your website? What did you learn in the process of creating them?