5 Reasons Why You Need Terms and Conditions

Summarise with: ChatGPT Perplexity Microsoft Copilot

---

Table of Contents

• 1. Transparency
• 2. Certainty
• 3. Limitation of Liability
• 4. Trust
• 5. Cost Saving

Business offerings come in all shapes and sizes. Traders often use catchy deals, terms and incentives to differentiate themselves from their competitors. Free blender with every purchase! Buy one, get one free! Sound familiar? It is becoming increasingly important to take care and read a business’ terms and conditions.

We know what you’re thinking – “is that the tiny print on the back of packages that we need a magnifying glass to read?” Yes, the one and the same. We’ve all been guilty of accepting such terms without so much as skimming the text. We assume there is nothing more than standard disclaimers of liabilities hidden in amongst some legal jargon. However, terms and conditions are tailored to the product or service offering, and while they may contain standard legal text, they also contain bespoke clauses which outline the particulars of the promotion. We set out below why from a consumer perspective, that seemingly irrelevant text is worth a read. Similarly, why traders should invest in a well-drafted set of terms and conditions.

1. Transparency

Consumers approach promotions with a degree of scepticism – if something appears too good to be true, it usually is. Your business’ terms and conditions should be clear and easy to understand. Customers can then read the document at their leisure and it saves the trader time as they typically address the most frequently asked questions.

2. Certainty

Reducing an offering’s terms into writing promotes consumer confidence. It can help resolve claims that the trader, for example, promised certain conditions during the bargaining process. Terms and Conditions typically include a dispute resolution clause, reducing the likelihood of long-winded arguments about who promised what during negotiations.

3. Limitation of Liability

All terms and conditions contain standard disclaimers, conditions and warranties that seek to limit the traders risk and liability. The benefit and extent of such limitation of liability clauses varies from case to case and bargain to bargain. It is sufficient to say that limiting your liability (even partially) is better than exposing yourself to unlimited liability. All limitation of liability clauses are subject to the Australian Consumer Law.

4. Trust

Comprehensively drafted terms and conditions are indicative of a business that has planned its business offering. Having the best services or products means little if long term, you don’t have the backend support to sustain and accommodate your offering. A simple document or suite of documents that increases transparency, promotes certainty, limits a trader’s liability and builds customer trust and loyalty is then a wise investment.

5. Cost Saving

Terms and Conditions that clearly set out the rights and obligations of all parties reduces the potential for disputes. Litigation is expensive and uncertain – there is no guarantee that you will win and even if you do, there is no guarantee that you can recoup all your legal costs. Alternative dispute resolution mechanisms while comparatively inexpensive, are still an avoidable cost for consumers and traders. Setting out expectations at the outset can save both parties time and money.

***

Questions about how to draft terms and conditions for your business offering? Talk to our business lawyers on 1300 544 755.