Online terms and conditions (T&Cs), or clickwrap agreements, are rarely read. When a T&Cs screen appears, most people will immediately click accept and proceed straight to their purchase or download. Because people ignore T&Cs, you may wonder whether your business’ online T&Cs are enforceable.

Fortunately, if set up and used correctly, you will be able to enforce your T&Cs. This article outlines some considerations you should have when drafting online T&Cs to ensure that they are enforceable.

Keep Your Online Terms and Conditions Short and Simple

T&Cs should be short and easy to read. Reading on a screen, especially a mobile device, is difficult. Your readers may be in a busy environment, or even walking, when your T&Cs appear.

Readers should be able to read your T&Cs relatively quickly and understand what their agreement means.

To improve readability, ensure that your T&Cs use:

  • plain English instead of complicated legal terms;
  • headings to direct readers; and
  • bullet points to space out text.

Make Readers Scroll Through Your Online Terms and Conditions

By forcing your customers to scroll through your T&Cs, you can ensure that your customers have at the very least seen them. This means that they should know that they have agreed to legal terms.

Making your customers scroll through your T&Cs also demonstrates that your business has taken steps to encourage your customers to read them. If a dispute about your T&Cs arises, this places your business in a far stronger position than a business that hides their T&Cs in tiny print or their website footer.

Have a pop-up scroll box so that customers are forced to read and agree to your T&Cs.

Highlight Any Important or Unusual Points

Any demanding or unusual clauses in your T&Cs must be made prominent.

For example, if you are a medical service provider, you should clearly state that customers must contact emergency services if there is a medical emergency. Because this is an important message and may not be obvious to some customers, you should include it in your T&Cs.

Some other important clauses in T&Cs are risk warnings and liability waivers.

For example, if you provide horse riding lessons and you take bookings online, your T&Cs should include a risk warning and a liability waiver.

Because these clauses will have a significant impact on the customer should they suffer an injury, you should make them very obvious to the customer. Making these clauses prominent will increase your chances of successfully relying on them if a horse riding accident occurs.

To give a statement prominence, you should:

  • include it at the front or top of the document;
  • emphasise it with design elements like borders, colours, bolding, capital letters and italics; and
  • include a short notice about the key terms in your T&Cs on your sales or booking page.

Remind Customers That Your Online Terms and Conditions Are Binding

Customers may not recognise that your T&Cs are a binding contract. Your customers enter this contract in exchange for your products or services.

Being clear about this in your T&Cs reduces the risk of a misunderstanding.

Notifying your customers that they are signing a legally binding agreement makes it easier for you to claim that the customer understood what they were doing when they agreed to your T&Cs. This improves your chances of relying on the terms in your T&Cs.

State that your T&Cs are legally binding:

  • at the very beginning of your T&Cs; and
  • as part of the click/tick to accept statement on your website.

Including this statement in the acceptance process will increase the chances of the customer noticing it.

Make Your Customers Give Active Acceptance

Some businesses only alert customers to their T&Cs by displaying a statement such as, ‘by signing up, you agree to our terms and conditions’. However, T&Cs are much more likely to be enforceable if the customer ‘signs’ the contract through a positive action. This positive action might be:

  • ticking an unchecked box; or
  • clicking an ‘accept’ button.

Where the customer indicates acceptance of your T&Cs, you should also have a statement such as, ‘I agree that by accepting these terms and conditions I am entering into a legally binding agreement for my use of this website’.

Affirmative acceptance creates a record of the customer’s acceptance. You can rely on this if a dispute arises.

It is also recommended to have the customer input a small amount of personal information before accepting the T&Cs. This step can:

  • show that the customer intends to sign up with you or purchase from you;
  • identify the customer; and
  • encourage the customer to properly consider the commitment they are making.

Have the customer fill in a web form with the details you require on your sign up or download page. Include an acceptance statement, a hyperlink to your T&Cs and a recordable click/tick to accept function on the page.

Give Your Customers Time

You must also ensure that you give the customer enough time to read and consider your T&Cs before accepting them.

For example, online ticket sales website Ticketmaster was found to be in the wrong because they did not allow customers time to read their T&Cs. Ticketmaster imposed a time limit on the check-out process by displaying a visible flashing counter. This pressured the customer to agree to the T&Cs before the clock ran out and was found to be legally unacceptable.

Avoid Unfair Terms

Under Australian law, you must not include any unfair terms in a standard form contract. A standard form contract is a contract that is:

  • provided in the same form to everyone;
  • non-negotiable; and
  • made for the supply of goods or services.

For example, your mobile phone plan or an airline’s conditions of carriage are standard form contracts.

The unfair contract term laws only apply if:

  • your T&Cs are a standard form contract;
  • either you or your customer is a business of fewer than 20 people; and
  • the upfront price payable is less than $300,000, or less than $1 million if the agreement will run for more than 12 months.

An unfair term will often affect one party positively or negatively and not the other.

For example, this could be a term that:

  • gives you the power to change the contract without your customer’s consent; or
  • outlines a penalty for breaching the contract that only applies to one party.

Check your current T&Cs for unfair terms. If you find any,  you will need to fix those terms.

Key Takeaways

It is important to ensure that your customers have read and understood your T&Cs and keep a record of their active acceptance. To improve the chances of your online terms and conditions being considered legally enforceable, you should:

  • keep your T&Cs short and simple;
  • make customers scroll through your T&Cs;
  • highlight any unusual terms;
  • clearly state that your T&Cs are a binding contract;
  • require active acceptance;
  • give your customers time to read your T&Cs; and
  • avoid unfair contract terms.

If you have any questions or need assistance with drafting your business’ T&Cs, please contact LegalVision’s contract lawyers on 1300 544 755 or fill out the form on this page.

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