Terms and conditions are a set of requirements uploaded to your website that users must comply with when using your website. For example, users would agree to terms and conditions when they buy something (i.e. “check-out”) on a website, clicking “I agree” before finalising the transaction.
What and why?
Your website should always have an up-to-date set of terms and conditions for the purposes of:
- enabling and endorsing good and proper user website conduct;
- maintaining and effecting appropriate governance; and
- safeguarding your business’ interests.
Most website terms and conditions include information related to:
- the products and/or services your business provides on your website;
- the conduct of your business in dealing with user’s personal information;
- the intellectual property rights associated with your business, products, services and/or website;
- licences of use with respect to the products or services on your website; and/or
- any disclaimers, indemnifications or warranties that are relevant to the users or your business.
Terms and conditions note that content on your website is the intellectual property of your business and cannot be used without the prior consent of your business. For example, your terms and conditions will reiterate that no party will be legally permitted to copy any words (i.e. Literary Works for the purposes of the Copyright Act 1968 (Cth)) from your website that is the property of your business.
Terms and conditions limit the liability that can potentially be claimed against your business, as a consequence of the user’s engagement with your website. For example, where a user experiences a loss, as a direct consequence of your website (or the products or services on your website), and your terms and conditions stipulate that any liability will be capped at an amount of $1, the maximum amount that may potentially be claimed against your business may be confined to $1.
Control over conduct
Terms and conditions set out the exact types of conduct that are permitted on your website, guiding the sanctions your business is able to implement where existing website users engage in undesired behaviour on your website, such as conduct that negatively impacts the reputation of your website, products, services or business. For example, where your terms and conditions stipulate that any anti-social behaviour (as determined by your business) on your website may lead to account bans, and the user engages in such behaviour, your business will be able to ban the user pursuant to such sections of your terms and conditions.
Control over types of visitors
Terms and conditions dictate the types of users that are permitted to use your website (and who such products and/or services are intended). For example, a clause in your terms and conditions may stipulate that your website is only to be used by, and is intended for, users aged 18 years and above.
Appropriate consent models
Clickwrap and browsewrap are the two ways that users can agree to terms and conditions on your website.
Clickwrap agreement is the process of agreeing to terms and conditions by physically clicking “I agree” (and checking the box) on a website, as seen in the below example.
Browsewrap agreement is the process of agreeing to terms and conditions by simply browsing on the website, that are usually contained in a separate hyperlink or page on the website.
Clickwrap is currently the most effective way for businesses that sell products or services directly through their websites, to have users consent to their terms and conditions. An example of the recommended process (to circumvent any ineffective consent) is as follows:
The user visits your website
Before the user is able to use the website, a pop-up appears requesting the user agrees to the website's terms and conditions
The user must scroll through the entire terms and conditions (in the pop-up) before the “I agree” button becomes clickable
After the user has scrolled through the terms and conditions, the "I agree" button becomes clickable, and the user is required to click “I agree”, in order to be granted access to the website
The user is unable to use the website unless the user clicks “I agree”