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.
Highlight Any Important or Unusual Points
Any demanding or unusual clauses in your T&Cs must be made prominent.
Some other important clauses in T&Cs are risk warnings and liability waivers.
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.
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.
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.
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.
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.
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.
Check your current T&Cs for unfair terms. If you find any, you will need to fix those terms.
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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