Photo by Andras Vas on Unsplash
Website terms and conditions, what's the point?
STEPHEN ANNICCHIARICO
TECHNOLOGY & IP ASSOCIATE
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.
Benefits
Intellectual property
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.
Liability
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
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
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.
Consent process
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:
Provide the necessary information
You will need to notify customers that your products or services are provided under the FLE and normal AFSL and CL protections do not apply in order to rely on the FLE.
Are of good standing
Before relying on the FLE, you will need to provide to ASIC certain checks (such as police checks) to show that you are of good standing, otherwise you will be unable to rely on the FLE.
Act properly
The FLE is inaccessible unless you adhere to certain general conduct and disclosure requirements during the 12-month period where you will be relying on the FLE to provide products or services to customers.
Don't exceed the customer and revenue limits
The FLE is not accessible if you offer products or services to more than 100 retail clients (unlimited wholesale), or have a total exposure of less than $5 million, or do not have professional indemnity insurance or an ASIC-approved dispute resolution procedure in place.
Don't hold an AFSL or CL or are banned
The FLE is not accessible if you are a holder of an AFSL or CLs (or authorised representative of a licensee), or are banned from providing financial or credit services.
