It is important to have a Website Terms of Use, Sales Terms and Conditions and a Privacy Policy to protect your business when you operate a website. We often get asked at LegalVision about what documents business owners should have in place when operating a business online. While these three documents can be presented on one page, you should understand what each document entails and the rights they offer for website visitors and your business.

In this article, we will focus on why you need both Website Terms of Use and Sales Terms and Conditions. These two documents can sound similar but they apply to different people and serve a different purpose.

Website Terms of Use

You need Website Terms of Use to tell those who visit your website, whether it is a customer with the intention of making a purchase or a competitor looking into what products you sell, how they are allowed to interact with your site. This document sets out the permissible and prohibited conduct in the use of the website and provides protection to your business. A well-drafted Website Terms of Use document will include clauses to protect copyrighted material, website content and Intellectual Property rights. It also limits your liability for the information it contains through disclaimers.

These terms apply to every visitor to your website regardless of whether they become a customer of yours in the future. This legal document is unlike Sales Terms and Conditions whose application is limited to customers.

Sales Terms and Conditions

Sales Terms and Conditions only apply to customers of your business but not to those visiting your website without making a purchase.

The Terms and Conditions can appear on the website in full for the customer to read and accept while they are in the process of purchasing a product or the customer can only acknowledge that they have ready the Terms and Conditions of making a purchase. You also have the option of providing the document in hard copy for the customer to sign but this is less common with businesses operating online.

You need a Sales Terms and Conditions to tell your customers what product you are selling, how you are going to sell them and the delivery of your products.

Well drafted Sales Terms and Conditions include clauses to outline:

  • How a customer can pay;
  • How a customer can cancel an order; and
  • How a customer can return, refund or exchange an item.

Like Website Terms of Use, it also limits your liability through disclaimers and indemnity. This factor is important to protect your business by outlining what you accept you can be held responsible for and setting out exactly what you cannot be held liable for.

Summary

Website Terms of Use apply to every visitor to your website whereas Sales Terms and Conditions only apply to customers. For this reason, we recommend you have both policies in place to protect your business from liability. As an online business ourselves, we can assist you with any enquiries you have about setting up an online presence.

Lachlan McKnight

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