Operating an online store means that you probably won’t ever meet your customers in person, and you can’t ask them to sign a legally binding document which sets out your right to be paid, in exchange for providing them with a product. This means that the only way for you to enter into a legally binding agreement with your customers is to make sure that they accept your business terms and conditions before transacting with you.

It is important that you have strong terms and conditions, as they are designed to protect your business against possible and anticipated risks involved in dealing with customers, such as non-payment, liability and faulty goods.

This article provides an introduction on the main issues that should be addressed in a set of terms and conditions for an online store.

Payment Terms

This is one of the most important clauses. There should be a section in your terms and conditions setting out how payment is to be made for your products. For most online businesses, full payment is usually required upon placement of order. This is the safest method for any business, as you are not required to provide anything until payment has been received.

To further protect your business, you can add that, until payment is cleared, no orders will be dispatched, and in the event that payment does not clear, the order is cancelled.

Delivery Terms

Delivery and shipping are ongoing risks for any online transaction, and should be dealt with in your terms and conditions. The delivery/shipping clauses need to state what the delivery costs are, explain how shipping charges are calculated, and most importantly, state that you cannot guarantee the quality of the delivery services of any third party service providers.

Australian Consumer Law

As a seller of products, you have certain obligations under the Australian Consumer Law and you are required to provide certain warranties. These warranties cannot be excluded or avoided by disclaimer; so if the goods or services fail certain standards of fitness or quality, then you must provide a repair or refund. If you have any questions regarding your responsibilities under the Australian Consumer Law, we recommend that you call your lawyers and have a chat.

Website Terms of Use

There is often confusion between terms and conditions and website terms of use. The website terms of use simply sets out the terms for using and visiting your website, and applies to every single visitor of your website. The terms of use generally cover items such as privacy and prohibited uses of the website. In contrast, the terms and conditions govern the relationship between you and each customer of your online store that transacts with you.

Conclusion

As a quick summary, without terms and conditions, your relationship with your customers will be governed by the Australian Consumer Law, which includes a suite of protections for the customer, and less so for the business selling the product. If you want to ensure that your legal rights are fully protected, you should have the terms and conditions for your online store professionally drafted to ensure that they are well tailored for your business.

LegalVision’s lawyers have plenty of experience in working with online businesses. If you have any questions, contact one of our online lawyers today!

Priscilla Ng

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