Businesses are increasingly moving their customer agreements online through terms and conditions (otherwise known as a clickwrap agreement). While this can be a quick and efficient way for businesses to convert customers and close sales, it also opens businesses up to the risk that their terms and conditions are unenforceable. However, your terms and conditions will likely be enforceable if you present them to the customer per best practices. This article sets out essential points for you (as a business owner) to consider when sharing terms and conditions online.
Like any legal agreement, your terms and conditions should be clear. Your terms and conditions should be drafted in plain English and should not be overly legal. You can use formatting to ensure your terms and conditions are not difficult to follow, for example:
Some businesses include their terms and conditions in a footer on their website. However, this is likely insufficient to ensure it is enforceable. You cannot guarantee that your customers will see the terms and conditions or even know they exist.
As such, the best practice is to share your terms and conditions with your customers before they ‘check out’ or complete a purchase on your website. If a customer completes a sale without being prompted to read the terms and conditions, you risk being in a position where your terms and conditions do not apply to that sale. Even if your customers are making several orders with you (for example, on your online shop), you should still ensure that they are accepting the terms and conditions before each purchase is complete.
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Your customers should have sufficient time to read and consider your terms and conditions. Avoid placing restrictions on customers to read the terms and conditions within a specific time.
While you cannot force your customers to read your terms and conditions, you can implement some best practice processes to increase the chances of your terms and conditions being binding and, therefore, enforceable.
By requiring your customers to scroll through your terms and conditions in full before they can click ‘Accept’ and proceed to the next page, you can ensure that (at the very least) your customers have seen and are aware of your terms and conditions. This also shows that your business has taken steps to present the terms and conditions to your customers.
You can work with your website developer to include a ‘scroll function’ for your terms and conditions.
To increase the chances of your terms and conditions being binding, you should require your customers to provide ‘positive consent’ when agreeing to your terms and conditions. Positive consent may be in the form of:
The above options should be presented in addition to wording like “by checking this box/clicking I accept, I agree to the Terms and Conditions”. In this way, you will have an audit trail of the customer’s consent and can rely on this as evidence in the case of any disputes.
While you cannot be sure that your customers are reading your online terms and conditions in their entirety, you should implement best practice processes such as:
These steps can increase the likelihood that your terms and conditions will be enforceable.
If you need help drafting your online terms and conditions or want advice about how you should prompt your customers to accept your online 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 1800 532 904 or visit our membership page.