What are Terms and Conditions?

If you operate an ecommerce store selling goods and/or services, it is vital that you have an accessible clear set of terms and conditions on your website that comply with the relevant consumer laws. Your terms and conditions is a form of legal agreement and will explicitly set out the rules of conduct between you and your website visitors/customers and must be followed should they wish to browse your site or purchase your products and/or services.

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Why you Need Terms and Conditions on an eCommerce Site?

Having a set of terms and conditions on your ecommerce site will serve as protection to your business and may help resolve problems in your favour should they arise e.g reduce your exposure to liability in the event that a product purchased from your website fails, so it is in your favour to make sure it is comprehensive. It can be seen as an opportunity to stipulate important aspects which will help to safeguard your business such as disclose conflict resolution procedures should any disputes between you and your customer arises, specifying how it will be handled and resolved, clarification of the purchasing process, protection of trademarks/ intellectual property (IP) etc. Not only that, having a carefully crafted set of terms and conditions on your website can help to instill a sense of trust in your business.

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What Should eCommerce Terms and Conditions Include?

The following are typical areas that an ecommerce site should address in its terms and conditions however this is not an exhaustive list.

  • Disclaimer of liability will specify the damages that one party e.g. ecommerce store owner, will be obligated to provide to the other e.g. customer, in the event of product failure and should reflect the level of risk involved. It will also specify what the ecommerce store owner will not be responsible for in the event of any loss, liability, damage (whether direct, indirect or consequential), personal injury or expense of any nature whatsoever which may be suffered by the customer.
  • Intellectual Property/Trademarks – e-commerce businesses are often more vulnerable to intellectual property theft, whether it be your images, design, content, logos, product descriptions or the overall look and feel of your website. An intellectual property clause should act to ensure that brands or trademarks are not misused in any way and clearly state that nothing contained within the website should be construed as granting any license or the right to use any trademark without the prior written consent of the owner of the website.
  • Payment Terms should set out how payment is to be made when purchasing products and/or services from your website. More often than not, full payment is required when an order is placed by a customer. This means that as an ecommerce store, you are not required to provide any goods until payment has been received. Some ecommerce sites will stipulate that until payment has actually cleared, no orders will be dispatched. In the case where payment does not clear, the ecommerce site has a right to cancel the order completely. These extra clauses serve as further protection to a business.
  • Data Protection should disclose how customer’s personal information will be used, stored and protected.
  • Delivery Terms should cover both shipping and delivery and would typically include what the delivery costs are and how shipping charges are calculated but also (where third party service providers are involved) that the quality of delivery cannot be guaranteed.
  • Product Information & Warranties should set out clear terms on how products can be purchased, whether there are any restrictions e.g. the restriction of sale for age-restricted products and services, and what happens in the event that a product cannot be supplied. Some online stores will also include warranty information as part of their terms and conditions whereas others will have a separate Warranty policy.
  • Right to cancel – This clause should set out the circumstances in which the customer has the right to cancel their order, the process in which they must follow in cancelling their order and any other requirements e.g. goods must remain unused and returned in it’s original packaging.
  • External Links are often provided on sites for the user’s convenience but there should be a clause to state that the links, and the related content, are outside of the control of the ecommerce store owner and usage should be at the user’s/customer’s own risk.
  • Website Terms of Use simply sets out the terms for accessing a website and applies to every single visitor. The terms of use usually cover items such as privacy and prohibited uses of the website.

It is important to understand that the purpose of eCommerce Terms and Conditions is to protect your business as well as your customers and should not be overlooked.

Your terms and conditions should be located somewhere that is easy to find on your website (on many ecommerce sites you will typically find it at the bottom in the footer) and written in a clear and concise manner. For those who are particularly concerned about the use of your ecommerce website by customers and fully protecting your business, consider making acceptance of the website terms and conditions a condition of sale ( you will typically see this on the purchase page where consumers are required to click on a box to acknowledge and accept them before proceeding to payment) or even entry into your website. This is known as ‘active agreement’ and gives ecommerce site owners an extra level of protection as customers will less likely be successful in any dispute where they claim that they were not aware of your terms and conditions.

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