Why have a terms & conditions document?
Sites or apps often overlook the importance of the terms & conditions. As a legally binding agreement, the terms & conditions document is like any other contract: among other purposes, it determines the rights and obligations of each party and the allocation and disclaimer of risk.
The main purpose of terms is to protect yourself and your company. Not having them may result in your business being liable if a user abuses your service or acts unlawfully or your business being forced accept extreme conditions as the example below for “withdrawal” shows.
All of this information should be provided before the user starts using the services or before a purchase is completed. The most common route is to bundle as many of these details into the terms & conditions as possible. Then you direct your users in such a way that they are going to read them (e.g. the user is required to click a button labeled ”I agree,” and told that clicking signifies consent).
How to write the terms & conditions document
These are some common elements that a terms & conditions document often have:
- Identification of the business (geographical and email address)
European online businesses are, in most cases, required to post the company’s name, postal address (registered office address if different) and email address, the company’s registration number (in a trade register), any trade or professional association memberships as well as the company’s VAT number. That information must be disclosed based on EU Directives and their corresponding national implementations.
- Description of the service that your site/app provides
- Terms of delivery or performance
- Grant of rights of use and limits on such use
- Terms, conditions and methods of payment
- Restrictions, limitations or conditions of purchase, such as parental/guardian approval requirements, geographic or time restrictions
- Instructions for proper use including safety and health-care warnings
- Information relating to available after-sales service
- Allocation of risk and limitations on liability
- Available warranties and guarantees
- Details of and conditions related to withdrawal, termination, return, exchange, cancellation and/or refund policy information
In the EU, consumers profit from a right of withdrawal that allows them to cancel the contract and send back their goods in many cases (provided that the deadline to exercise this right is met). If you don’t inform your consumer/buyer of their 14-day withdrawal right in the terms, that withdrawal period will extend to another 12 months (!).
In the United States, shipment information should be outlined in the terms, if you don’t make a promise, then you should ship within 30 days. If you can’t ship within the promised time, you must notify the customer of the delay, provide a revised shipment date and explain his right to cancel and get a full and prompt refund.
In the United States, many states have laws addressing returns/refunds. For example, California law states that merchants are required to clearly post their refund policy unless they offer full cash refund, exchange, or store credit within seven days of the purchase. If a business violates this requirement, customers may return goods for a full refund within 30 days of the purchase.
Publishing the terms & conditions:
Other considerations for posting of a terms & conditions document:
- Make them available in a way that allows the terms to be stored and reproduced by your users.
- Integration with the purchase process: ideally, the user should be required to check a box to indicate that he or she has read, understood and accepted the terms before completing the sign up or sales process.
- Accept button: the accept button should only work when the accompanying radio box has been checked (and the user cannot proceed without consent).