Terms And Conditions
Written by: Gabrielle Andersen l Insight Team
Welcome back to our Commercial Law Series, where so far we have covered the following legal aspects of setting up a business:
- Privacy + Data Protection: Protecting Yourself + Your Clients In This New Era
- Setting Up A Business – A Legal Checklist
- A Legal Guide To Business Structuring
- Financing Your Venture
- Obligations to Employees + How To Manage Them Effectively
- Obligations to Your Clients: Consumer Law Advice
Follow the above links to review any other areas of our Commercial Law Series that might be useful to your business.
Now we move to the practicalities of offering your product or service to your customers and investigate the effectiveness of having well-prepared terms and conditions.
What Are Terms And Conditions?
Generally speaking, terms and conditions are the rules and obligations you want to advise your customers about when they decide to use your business’s products or services.
If well drafted, they should ensure that your customers understand their contractual rights and obligations when agreeing to use your product or service, as well as set out important limitations or disclaimers for you in delivering that product or service.
Often terms and conditions are offered on a “take it or leave it” basis, which means they are not able to be negotiated by your customers. They can be presented to your customers via your business website, or attached to any quotations or agreements to provide works. If you are selling goods, they may be stated on the back of your receipt which is often where businesses communicate their exchange or refund policy.
Why Does Your Business Need Terms And Conditions?
Terms and conditions are crucial in communicating to your customers exactly what to expect in relation to your product or service. Often business owners assume many aspects of their product or service are straightforward, and may only realise that some aspects haven’t been communicated to a customer when that customer expresses their dissatisfaction with the product or service provided.
Nobody likes conflict and terms and conditions can be an important step in minimising disagreements with customers as they communicate exactly what is being offered from the outset, and are invaluable in managing your customers’ expectations. They can also set out your payment terms, and are therefore an important basis for confirming your customer’s obligations to pay for your goods or services if they refuse to provide payment when due.
Terms and Conditions for Online Businesses
The Australian Consumer Law requires businesses to have very clear documentation on their websites if running a business online. The government guidance on business websites states they must contain the following statements and policies:
1. Terms and Conditions – if you sell products or services online, your terms and conditions should be stated on your website and outline the specifics relevant to the purchase, your payment options, any cancellation, return and refund policies, your complaints process, and an overall confirmation of the consumer guarantees as specified under the Australian Consumer Law.
2. Privacy Policy – to confirm your obligations in relation to any personal or sensitive information you are collecting under the Privacy Act 1988.
3. Website Terms of Use – these are different to terms and conditions as they relate to the customers’ use of your website specifically. They include statements protecting your business ideas, and provide disclaimers and rules applying to anyone interacting with your website.
These statements and policies must align with the consumer guarantees under the Australian Consumer Law and any other relevant legislation. This is why having a lawyer prepare your terms and conditions is crucial.
Take a look at our previous article on Obligations To Your Clients: Consumer Law Advice for more information on the consumer guarantees.
What Should Your Terms And Conditions Contain?
In order to communicate exactly what you are offering (and not offering) to your customers, terms and conditions will usually address the following matters:
- Confirm the type of products or the service being provided;
- Set out your terms in relation to the delivery of the products or service;
- State your payment terms – specifically when and how payment will be required and what you will do if payment is not provided by the due date;
- Confirm your business’s obligations in relation to the privacy and use of your customer’s personal information;
- Contain important protections for your business in relation to your ownership of any intellectual property forming part of the product or service;
- State the customer’s obligations in relation to any of your business’s confidential information that they may be privy to when receiving your products or services;
- Set out any complaints, feedback or disputes processes you may wish to have followed in the event there’s a disagreement between you and your customer;
- Confirm how, when and why either party may terminate the agreement in relation to the provision of the products or services; and
- State any other more general limitations and disclaimers in relation to your product or service.
Sometimes your terms and conditions might confirm the cost of the products or services, however specific costs might instead be addressed in your quotation or invoice.
Another important aspect of terms and conditions is that they provide an opportunity to confirm your privacy policy to your customers. You may choose to have specific privacy terms within your terms and conditions, or have a separate privacy policy on your website, depending on the nature of your business. For more information on the importance of addressing privacy and data protection within your business, take a look at this previous article we put together: Privacy + Data Protection: Protecting Yourself + Your Clients In This New Era.
Canny Insight + Expert Legal Advice
In our previous article on Obligations To Your Clients: Consumer Law Advice we explained the importance of understanding aspects of the Australian Consumer Law when delivering products or services to your customers. This is a complex area of law and it is important that your terms and conditions adhere to your obligations under these laws. Having a lawyer assist your business in preparing your terms and conditions can provide you with peace of mind in ensuring that they are not only specific to your business needs, but also do not avoid any of your Consumer Law obligations.
Get in touch with the team at Canny Insight today to see how we can assist your business in preparing your terms and conditions, or simply review the ones that you may already have set up and in place.
And stay tuned for next month when we examine the importance of Service Agreements, which are a more specific contractual version of terms and conditions. They are particularly relevant for businesses entering into certain projects or works and who want additional protections that might not always be provided for in your standard terms and conditions.
