Website Terms and Conditions.

How important are they?

In 1995 there were an estimated 16million internet users. In 2013, that number has ballooned to 2.8 billion, or 40% of the world’s population. Few businesses are without a web presence, therefore implementing effective Website Terms and Conditions of Use on your website is vital for the success and compliance of your business. It is concerning that the level of legal disclosure in these areas has not kept up with the pace of e-commerce. Though most business websites do have some form of disclosure, it is obvious that many have simply copied language found on other websites. This is fraught with risk.

Small Print

Whether your website is informational only, allows user-generated content or supplies goods and services online, you will need some small print. Website Terms and Conditions of Use should cover important issues such as liability, content moderation and jurisdiction. To have a binding contract, Website Terms and Conditions of Use should be clearly visible on your site and accepted by the user. This is particularly fundamental for sites conducting e-commerce activity.

As with the formation of any contract, for Website Terms and Conditions of Use to be enforceable it must possess five elements:

  • an offer from one person to another;
  • an acceptance by the person to whom the offer has been directed;
  • consideration to support the contract;
  • an intention to create legal relations between the parties; and
  • capacity on the party of all of the contracted parties.

In e-commerce each of these has specific aspects that need to be considered. Customers must properly communicate acceptance of the Website Terms and Conditions of Use Use. The mere linking of Website Terms and Conditions of Use at the footer of your homepage does not necessarily constitute acceptance by your customers. Website Terms and Conditions of Use should also include clear definitions, the provider’s and customer’s obligations, payment methods, termination triggers, liability, intellectual property protection and confidentiality restrictions.

We all like checklists

Here is a basic, user-friendly checklist of some important issues to consider when formulating Website Terms and Conditions:

  • Have you published information about your company? (registered company name, email address, registered company number, business address etc.)
  • Have you properly communicated your Website Terms and Conditions of Use on your website so that they are clear and sufficiently brought to the attention of your customers?
  • Are your Website Terms and Conditions of Use fair and reasonable?
  • Do you direct your customers towards the Website Terms and Conditions of Use during the sale process and all relevant disclosure points?
  • Have you sufficiently protected your intellectual property in your website and your brand?
  • Do you make it clear that your potential customers are making an offer when placing an order which you can either accept or decline?
  • Have you limited your liability and if so, are the limitations reasonable and complaint with consumer laws?

Concluding remarks

Carefully drafted Website Terms and Conditions of Use is essential to your online business practices. A review and possible update of your online Website Terms and Conditions of Use should be a high priority for your business. Not only is it the law, it is also good business practice to adopt sound contractual governance and privacy practices in your e-commerce business.

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Posted on: 28 November 2013