Why you need website terms and conditions

17 June 2021

Website Terms and Conditions are probably the least-read, lowest-traffic pages on any given website – but that’s not a good enough reason to skip including this page on your business website. There are several reasons that having a solid, tailored Terms and Conditions page is essential. 

image showing Website terms and conditions

What are Terms and Conditions?

The Terms and Conditions form a legally binding agreement between your business and website users. This is where you can define intellectual property ownership, acceptable user behaviour, data retention and use, and other business-relevant topics. 

If your website collects personal user information, e.g. through a sign-up form, your website should also have a formal Privacy Policy. This is separate from the Terms and Conditions. 

When your website also includes an online store, you may ask customers to agree to a set of conditions of use before setting up an account or making a purchase. This might include the type of product, payment terms and delivery timeframe, refund policy and dispute resolution. Generally, they would also be agreeing to the website Terms and Conditions as part of this agreement. This is a great strategy to mitigate risk and define dispute resolution as well. 

In Australia, Terms and Conditions need to be compliant with Australian Consumer Law. However, you may still limit your liability in a number of very effective way – for example, you can provide only the minimum warranties required by law, cap your liability to a set amount, and sometimes you may even insist that you only have to resupply the goods or services (as opposed to providing a refund). 

Why are Terms and Conditions important?

In the case of a legal dispute related to your website, the Terms and Conditions should protect your business and limit liability from any claims. Many boilerplate templates will provide a degree of protection, but it can be much more useful to tailor your Terms and Conditions to your industry and business operation. In particular, Terms and Conditions for marketplaces or review websites can clearly specify that your business is not actually liable or responsible for goods or services provided by others, or recommendations provided on the website.

What should I include?

To effectively limit liability, your Terms and Conditions should include items like disclaimers for website content errors and website user behaviour and/or speech. This ensures your business cannot be held liable for issues arising from website errors, abusive user behaviour, and defamatory user comments. Depending on your industry, you may also wish to include a disclaimer that your website content is not providing advice – legal, medical, financial or otherwise. This is extremely important, as you don’t want visitors to allege that they relied on your advice for high-risk decisions.

If your website also includes a user-account feature – for example, an online store, message board, or client portal – your Terms and Conditions should clearly set out unacceptable user behaviour and when you may suspend, terminate, or ban a user account. This document should also clearly state that your business does not take responsibility for user behaviour, including opinions expressed. Depending on the website’s structure and operation, you may want to consider a specific termination clause that defines actions that result in immediate account removal.

If a user interrupts or attempts to interrupt website operations through malicious actions such as malware infection or DDOS attack, your Terms and Conditions should clearly state this is a breach and may trigger legal action. 

While your Terms and Conditions should have a section dedicated to intellectual property and copyright, it’s also a good idea to include a copyright notice in the footer of your website. This can be as simple as “Copyright © [year], [business name].” This is not strictly required in Australia, but it is in other jurisdictions like the United States. Within the full Terms and Conditions document, you should include a more detailed section that defines your ownership of website content, design, logo, and so on. You may also want to define a resale policy and any specifics around confidential information contained in products such as digital downloads. For websites which contain sophisticated software, you should also include protections against others copying or reverse-engineering the website.

As mentioned earlier, if your website is collecting personal information, a privacy policy is recommended so users can be considered informed as to how your business is handling and storing their personal data. The collection, handling, and storage of personal information is closely regulated in many countries. Depending on where your website is hosted, where you’re storing data, and whether you have clients in the EU (who may be affected by the relatively new GDPR compliance regulations), this document could be quite complex. It’s imperative to understand which website services are storing data and how to ensure you’re fully compliant with relevant privacy legislation. Engaging a legal professional to review this piece is recommended.  

Similar to your business’s standard service agreement, your Terms and Conditions should clearly state the jurisdiction under which the Terms and Conditions operate and any claims will be subject to. This defines how and where your company will deal with any legal website-related claims. If your website is operated from a different country than the country where your business is registered, consider consulting a legal professional to discuss the best course of action. 

How do I create my Terms and Conditions?

Suppose you’re reasonably familiar with the standard inclusions in a Terms and Conditions page, and you feel confident you’ve identified all areas where you may need to add, remove, or customize language specifically relating to your industry and/or your business. In that case, you might want to consider creating your own Terms and Conditions document by using an online generator. There are many websites – some free, some not – that will generate a standard set of website Terms and Conditions. However, a word of caution; if you’re not comfortable with reading, understanding, and modifying legal language, this might be a riskier choice. Your Terms and Conditions need to be robust, fit-for-purpose, and legally binding. They might seem like a trivial add-on page, but if you ever need to rely on them for a legal matter, don’t find yourself with regrets. 

A more prudent approach is to have a legal professional draft (or, at a minimum, review) your Terms and Conditions website page. This ensures your document is legally binding, accounts for any irregularities in your particular business, and is tailored to your industry. 

If your business website includes an online store, it’s a wise move to get some legal input – and the same applies if you’re gathering and storing large quantities of sensitive personal data. 

Next steps

If you operate an online store, offer digital downloads or a Saas solution, collect personal information, or just want to mitigate business risk, your website needs a Terms and Conditions page. 

At UX Law, we provide startups and entrepreneurs with practical legal solutions to protect and empower their business. If you need any assistance with drafting a tailored set of terms and conditions for your online business, get in touch with one of our start-up lawyers or don’t hesitate to call us on 9343 0381