It’s not uncommon for customers to skip or gloss over a company’s terms and conditions. So you may think: “If customers don’t bother reading the fine print, why should I bother creating them?”

Well, there are good reasons not to overlook or minimise the importance of a detailed set of terms and conditions. Having a policy in place can help you avoid three big problems.

  1. Lost customers

Let’s say you shopped around for insurance: you’d probably want to know what an insurance policy covers, what exclusions or waiting periods apply, and how the claims process works. If you can’t find that information, you’d probably go elsewhere, right?

So will your customers.

To avoid confusion and possibly losing customers, place your terms and conditions on your website, any relevant marketing material and contracts. If you have an ecommerce store, make sure product, pricing, payment and return terms are clear.

  1. Costly lawsuits

Your terms and conditions can protect your business from disputes that could lead to costly and time-consuming lawsuits. Should a discrepancy occur that results in a customer taking legal action against your company, the law will look at your terms and conditions policy to guide their ruling.

Note that your terms may be rendered useless if the customer hadn’t agreed to them or had the terms brought to their attention before the transaction occurred (e.g. by being listed on an invoice or online checkout page).

Don’t make the mistake of thinking a ‘frequently asked questions’ section will suffice. An FAQ section is a great way to explain how your business operates, but it doesn’t qualify as a legally binding agreement.

  1. Distrust in your brand

There’s nothing that destroys a customer’s trust faster than unmet expectations and conflicting information. Providing a clear set of terms and conditions avoids misunderstandings that can undermine trust in your brand.

When your customers know what to expect, they will feel safe purchasing from you. Should an issue arise, they will know how you will respond. That creates a trustworthy relationship.

When drafting terms and conditions, make sure it is not skewed for your protection only. A balanced policy that protects both you and the customer inspires trust in your company.

What should your terms and conditions cover?

While there’s no one-size-fits-all terms and conditions policy, generally, it should include the following.

  • Sales and transaction process
  • Obligations and responsibilities of the consumer and the company
  • Timeframe for product delivery or for a service to be completed
  • Payment terms
  • Return and refund conditions and process
  • Repairs and replacement policy
  • Product guarantees or warranties
  • Disclaimers
  • Privacy policy
  • Termination of service policy

This list is by no means exhaustive and may require additional information specific to your business. Don’t try to draw up terms and condition policy yourself or base it on another business’s policy, as you may omit some crucial legal stipulations. It’s best to hire a commercial lawyer who can write a policy that is tailored to your business.

Blaine Hattie is a small business lawyer at Sutton Laurence King Lawyers.

 Sutton Laurence King is experienced in drafting commercial policies and contracts. Contact us on 03 9070 9810 or email info@slklawyers.com.au.