I’m often asked whether a contractual term or condition is legally binding, and/or enforceable.
Because let’s face it, so many people don’t take time to read, and properly understand ALL the clauses in a contract. Just think of all the times you:
– clicked “accept” on a cookie message,
– or skimmed through a business service agreement or client contract,
without reading the terms and conditions.
Adding “unique” clauses to Terms and Conditions
In 2017, the esteemed law firm, Minter Ellison, identified a situation in the UK where a free WiFi provider added some “extra special” clauses to their terms and conditions. The reported intention was to highlight the things people agree to, without realising what they are agreeing to.
It is an interesting social and legal experiment that I’d love to explore further with you.
You can read the full article here – it’s well written by Minter’s so I won’t meddle with the details.
The question the article deals with is “Can you really use online terms and conditions to bind someone to clean your toilet?” The article goes on to discuss whether the temporary extra clause added to a business’ online T&Cs would be legally binding, and enforceable.
As I read through this article, I realised nothing has changed in the past few years. Today’s pandemic has rapidly increased the size of the online e-commerce economy and skyrocketed event costs due to last-minute lockdowns. Yet people still agree to conditions they don’t know about or understand. People are still caught out by a business’s refusal to refund a booking fee. Or surprised at Australia Post’s neglect to take responsibility for items lost in transit.
How does this work in Australia, and for small businesses?
First: A business must provide an opportunity to review the terms and conditions of their contract, BEFORE signing off. It’s not enough to process payment, and THEN issue a receipt that includes Ts & Cs printed on the back, for example.
Second: The clauses must be reasonable, and not unfair, or beyond the customer’s control.
Third: For online contracts or conditions, there must be a reasonable attempt to properly identify the purchaser, before they become liable which is why well-drafted tick box agreements for online shops and purchases are essential.
Finally: If you have unusual contract conditions, then you need to ensure:
- Your customer has an appropriate opportunity to read and understand your terms and conditions, before asking them to accept. An example is where the terms and conditions document must be scrolled through in order to reach the “accept” button at the end.
- You have a process in place, to accurately identify each person agreeing to your terms.
- You clearly state that agreeing to these terms will form a legally binding contract.
- You especially highlight any terms which are unusual, or outside a standard condition.
Sadly, it’s not enough just to “include” your terms, conditions, and policies into your website footer. You must actively take steps to bring them to customer’s attention and require their participation in accepting them, including having them properly drafted, using tick box agreements where possible, providing link headings in prominent font size, and easily read and identified by the website visitor.
Terms and Conditions are incredibly important for businesses – especially small businesses, because you can’t afford to lose money, or end up in court, not to mention being roasted on social media because a customer chose to ignore your special conditions.
Well-drafted documents are a great start, but you also need to set up your processes correctly.
Confused? I can talk you through your business processes. Book a 10-minute Quick Chat with me, and I can sort out a lot of basic questions. If anything seems more complicated, I can advise whether further, more detailed consultation is recommended.
Source info: “Can you really use online terms and conditions to bind someone to clean your toilet?” https://www.minterellison.com/articles/can-you-really-use-online-terms-and-conditions-to-bind-someone-to-clean-your-toilet
Disclaimer: This blog is written to support business owners to consider legal requirements and issues that may arise in business. The information provided is for general and educational purposes only. It is not intended as legal advice for your individual circumstances. Please consult your lawyer for advice specific to you and your business.