How to write business terms and conditions
Essential elements of your business terms and conditions
Your terms and conditions are arguably one of the most important documents you will produce for your business. This legally binding document not only protects your business interests, but also provides a level of comfort and peace of mind to potential customers.
When drafting or refreshing your own terms and conditions, there are a few key points to be aware of and we outline these below.
Keep it simple
When potential customers review your terms and conditions, it’s important that you use simple language and clearly articulate the details of the agreement they are entering into with you.
Avoid unnecessary legal jargon, keep it short and to the point. No one likes to read pages of text and if your document is long and complex, customers may worry they are missing a key detail in the fine print. This can be enough to prevent some customers from doing business with you.
Clarify complex terms
If you can’t avoid legal terms or complicated language, clearly explain what they mean in a ‘’Definitions’’ section of your document. The more transparent your terms are, the more trustworthy your business becomes in the eyes of your customers.
Inclusions and exclusions
Remove any possible assumptions around inclusions and exclusions. Detail exactly what is provided for the fee being charged and what can be accessed for an additional fee. If you offer different product price points or levels of service, communicate these differences clearly.
Copyright protection
This section protects your intellectual property and advises customers that your ideas, information, words or images cannot be used without your consent.
Avoid misleading or false statements
You are bound to your terms and conditions, so never include any potentially misleading statements. Not only do you want to promote yourself as honest and transparent, you also want to fulfil your own legal obligations. Misleading, deceptive or false statements could result in you being prosecuted under Australian Consumer Law.
Payment terms
One of the most important elements of your terms and conditions, your payment terms need to clearly explain when and how the customers are to pay for your goods or services. You should also outline any fees, charges or interest that may apply to late payments.
You may decide to hold your debtors liable for any costs incurred should professional debt collection services be required or legal claims need to be pursued. It is recommended you seek legal advice to ensure this statement is complaint with ACCC practices and guidelines.
Modification
This section provides you with the ability to make reasonable amendments to fees, or to your terms and conditions. You need to articulate that customers are bound by these changes, and explain how they will be communicated.
Customer satisfaction
This section is used to outline what channels your customers should use if they are not satisfied with the products or services they have received eg email, letter or phone. Explain the complaints process and how problems may be resolved should they arise.
Refund and return policy
Australian Consumer Law makes it compulsory to clearly state your refund and returns policy. Include information on warranties, exchanges, refunds and the time limits and/or conditions that apply.
Limitation of liability clause
You should protect your business by including a limitation of liability clause. This clause effectively “caps” the amount of potential damages to which a company is exposed. It is highly recommended that you engage a legal professional to help draft this section.
Privacy policy
The digital age we live in means you must be transparent with how you will handle your customer’s personal information. A copy of your privacy policy should be on your website, and referenced within your terms and conditions.
When preparing your terms and conditions, remember to be transparent, be succinct and seek professional advice to ensure your legal obligations are met. Appropriate consideration of the key areas of your terms and conditions will ensure you are well on your way to protecting your business.