When most of us hear the words Terms and Conditions, our eyes glaze over and we yawn as we click ‘Agree’ or just pass over and sign the document. The super fine print and many pages of legalese don’t help, but as a business owner, you should pause and think about how you approach these. As a business owner, Terms and Conditions are vital for safeguarding your operations. Not having a set of clearly defined terms and conditions can leave your business open to legal complications down the track, usually that you find out when something goes wrong.

Ask yourself a few basic questions to test how well prepared in your business:

  • What are the limitations of liability for your product or service?
  • If your clients don’t pay on time, can you charge interest? Will they pay collection fees?
  • Do you comply with privacy laws?

The most common way of approaching terms and conditions for many small businesses is to still them from someone else, and hope for the best. This is not sound business strategy, and the cost of getting T’&C’s done properly can be a good investment that saves way more in the long run. Below we’ve outlined a list of ways terms and conditions can protect your business.

Outlining Your Policies

A set of terms and conditions allows you to outline your expectations and policies as a business. This essentially establishes the legal basis of your relationship with your customers. For example, you can set out the payment process and the consequences for not following these terms. 

Terms and conditions are also known to be the home of refund and return policies. In order to comply with consumer law, it is wise to include your refund policy in your terms and conditions. Having this clearly outlined and agreed to by your customers, will ensure you respect their rights whilst also protecting your business at the same time. 

Limiting Your Liability

Terms and conditions enable you to set out both parties responsibilities and obligations. This gives you a clear record of what has been agreed to by the consumer. As a result of this, it is common for businesses to include a clause that will limit their liability in a variety of situations. When a party agrees to these terms and conditions, they generally give up the ability to sue you over any of the contents. 

For example, businesses that are based around physical activity may include strict rules that must be followed for safety purposes. They may exclude themselves from liability if a customer fails to follow these terms. Similarly, online businesses that publish user content often have a condition that states they aren't accountable for any offensive material.

It should be noted, however, that you cannot contract yourself out of complying with consumer guarantees. (e.g. ensuring goods are of acceptable quality). If you are uncertain about putting a limitation of liability clause in your terms and conditions, the advice of a business lawyer may be of use.

Protecting Intellectual Property 

The contents of terms and conditions can also serve to protect your business’ intellectual property. You may have unique assets that you have trademarked or that belong to you under copyright. By outlining what your intellectual property is in your terms and conditions, you’ll be adding an extra layer of protection. This is because once a user agrees, you essentially have a contract with them that can be used to prove a breach. 

Establishing a set of terms and conditions for your business should really be a no brainer. You’ll gain a base level of protection from costly legal action whilst offering transparency to your customers. Creating your terms and conditions isn't a complicated process and can be done online. The time spent now will be well worth it when an issue arises in the future.

Lawpath is Australia's leading provider of online legal services, for individuals and businesses, providing technology-powered legal solutions at a fraction of the time, cost and complexity of the traditional system.