You have taken the time to draft a great set of terms and conditions and you are ready to do business. However, you may wonder at what point your customer accepts your terms and conditions. If a dispute arises over the point a contract becomes binding, it can have serious consequences for your business. This article will explain when terms and conditions become effective and legally enforceable.
Terms and Conditions: an Overview
One of the most important business documents is the set of terms and conditions you use to do business. Terms and conditions, also called a contract, govern the nature of your relationship with your customers and suppliers. Well-drafted terms and conditions will help your business run more smoothly.
The exact nature of your terms and conditions largely depends on the industry your business operates within. Some essential clauses include:
- the nature of the goods and services you will provide (or acquire from a supplier);
- how these will be delivered;
- payment terms;
- how the agreement will terminate;
- intellectual property protection; and
- dispute resolution procedures.
Knowing when a customer accepts your terms and conditions is important because it is when the contract begins. Where there is a contract, each party must perform their obligations owed to the other. If there is no legal acceptance, there is no contract.
Forms of Acceptance
Terms and conditions can take many forms. For instance, they may be in a physical document you present to your customer. This document may exist on its own or attached to a quote for services. Alternatively, it can exist as an email.
Express Consent
The most obvious and common way to ensure customers accept your terms and conditions is to have them explicitly tell you they accept. Affirmative acceptance is a clear-cut way of removing any ambiguity. Usually, this entails them signing the document and returning it to you. Physical as well as electronic delivery works.
You can also display terms on your website and require customers to click a checkbox confirming they agree. You should ensure your customer has enough time to actually read the terms and conditions. Provided the customer has the means to review all the terms and the terms are reasonable, it does not matter if they read them.
Implied Consent
Implied consent is where the law infers acceptance from the parties’ conduct. For instance, if a customer asks you to proceed with your services and you do, the law would likely say they accepted your terms and conditions.
Implied consent can arise through your website, such as a browsewrap agreement. This is an agreement that the user accepts the terms by accessing the website. That said, browsewrap agreements are inappropriate when offering goods or services.
As a general rule, you should proceed with caution in these situations. Explicit acceptance is always safer. This is because the customer has less room to argue they did not consent.
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Key Takeaways
When terms and conditions become effective is an important question. A customer accepts your terms and conditions expressly or impliedly through their conduct. Without a lawful acceptance, the law does not recognise an effective contract. Absent a contract, you cannot hold your customer or supplier to any obligations you otherwise agreed to.
If you need assistance with your terms and conditions, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
A contract is a legally binding agreement wherein promises have been made between two or more competent parties, and a form of value has been provided as a result of that agreement.
If a contract satisfies all the elements outlined in this article, the contract may be legally enforceable. This means that the wronged party or parties can take action against the party that has failed to perform its obligations.
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