5 November 2019|Legals & Compliance
It’s important for a business, especially an online business, that your customers know clearly what they are purchasing and what your terms of business are.
T&Cs, as they are often called, are the clauses in a contract that set out the rights and obligations that both parties should be aware of when they enter into a contract.
Beware the small print
Some of the biggest mistakes that businesses have made in the past are believing that if they hide their terms from the customer, and the customer signs the contract, that these terms can be relied upon. In other words, if the terms of the contract are part of the ‘small print’, the belief is that once the customer signs the contract, whether or not they have seen or read the terms, that they will be bound.
Is this true? Can the terms forming part of the ‘small print’ be relied upon? The answer in general, is no!
However, if the business specifically draws attention to the T&Cs and asks the customer to tick a box to state that they have read and agreed to be bound them, that’s a different story.
Landmark case
back in 1940 there was a case in the courts about whether a local authority could rely on a disclaimer (against personal injury) on the back of a ticket given to a customer who hired a deck chair. The courts made the point that in order to rely on this, such a disclaimer would have to be brought to the customer’s notice at the time the contract was being made. In this case it wasn’t, since the customer only received the ticket after he paid over the money. One of the Judges in that case commented that if the attendant had mentioned the disclaimer to the deck-chair hirer, before he handed over the money, then possibly the disclaimer would have been activated and could be relied on.
It’s the same with regard to T&Cs. They must be brought to the customer’s attention before anything is signed.
Clarity
As a business, it’s essential to draft T&Cs that reflect the business requirements, and there should be no ambiguity. If badly drafted, customers may interpret them in a different way to was intended. It therefore becomes a matter of being precise and succinct so that there can be no misunderstandings.
Be simple with terminology and don’t use legal jargon since very few people know what this means. The more the language is complicated, the more likely that an individual will not bother to read it and this may encourage them not to proceed. On the other hand, if there’s a tick box to say they agree to them, and they tick the box, then it may well be legally binding whether or not they have actually read them.
Customer complaints about T&Cs?
If a customer complains that they were unaware of a term in the contract and the customer has ticked a box to state that they have read the T&Cs and agree to them, then unless the term relied upon is legally unenforceable or ‘unreasonable’, the customer will not have much recourse.
The burden will be on the customer to provide evidence that it’s unenforceable or unreasonable in the circumstances. Every business should have a complaints procedure and the first step that a customer should take is to follow this. From a business’s viewpoint, it’s always best to try to resolve the customer’s issues before it is taken further.
Whether or not the business decides to acquiesce to the wishes of the customer is up to the individual business. However, it may be best to consider whether or not there is grounds for the complaint. For example, maybe the reason for complaint is indeed because the term in question is ambiguous and could be misinterpreted. If so, this is a good opportunity to revisit the T&Cs and tighten them up.
At this point, if legal expertise is required to cast an eye over the T&Cs, then it may be a good idea to use the services of a specialist paralegal who can offer advice and assistance at a reasonable cost.
AUTHOR:
Amanda Hamilton is Chief Executive of the National Association of Licenced Paralegals (NALP), http://www.nationalparalegals.co.uk
