1. Why attach terms and conditions to the use of your website?
Terms and conditions which you apply to the use of your website by others are designed to limit your legal liability or increase the legal remedies available to you.
The terms and conditions used in a particular case will depend on the legal risk profile of your website. The risk profile varies with the functionality, content, transactions and nature of business included or facilitated by your website.
If end-users are permitted to upload to your website, you are potentially liable for anything they post on your site. Legal liability may arise for infringing copyright and moral rights, or posting defamatory or objectionable content. See Develop a Business Website. For example, a website owner was held liable for breaching the Corporations Law by publishing securities advice without a licence. Liability arose for operating a chat room that brought together people who discussed their investments in Australian stocks and shares.
The terms and conditions of a website may limit the people who can use the website according to their geographical area, their purpose or their contribution to the site.
The terms and conditions of a website are unlikely to be able exclude or restrict liaBility arising from the operation or function of the website in all circumstances. Trade practices legislation may imply certain warranties into your website terms and conditions.
2. Notifying users of your terms and conditions
Terms and conditions (or disclaimers) must be drafted and incorporated into your website in a manner that makes them legally enforceable and binding on a user. A user must have notice of the terms in order to be bound by them. Given terms are generally included to limit potential liability, ineffective or unenforceable terms will significantly increase your potential legal liability.
Mechanisms used to legally bind a user to your terms and conditions depend on the importance of the terms to your business. Three common enforcement mechanisms are:
(a) Notice of terms and conditions to the end-user
May be effected by:
* a link at the bottom of the web page labelled "legal notices";
* a pop-up screen with the relevant terms when a user clicks on a part of your website which gives rise to a liability that you are attempting to limit or disclaim; or
* an intermediary screen with the terms and conditions that automatically loads when a user attempts to go from homepage to content for the first time.
Ensure the user or customer has been given reasonable notice of terms and a reasonable opportunity to refuse them.
Where the terms and conditions are incorporated by this method, ensure the terms and conditions are displayed in circumstances in which it is reasonable to expect the presence of such terms and the attention of the user is drawn to the terms. This method is often used for general conditions of use including copyright disclaimers or privacy policies.
This enforcement mechanism should not be used for carrying out online transactions or authorising clients to upload information. The customer may claim to have missed the terms and consequently not be bound by them. In relation to online transactions or authorising clients to upload information from or to your website, alternative enforcement mechanisms are recommended including a click wrap agreement or a digital signature mechanism (see below).
(b) Clickwrap agreement
A clickwrap agreement ensures the website visitor reads the terms and conditions.
Clickwrap provisions are a system that prevent a user from carrying out an action on the website until they have agreed to the terms and conditions of use. The terms and conditions of use generally pop up in a new window with a button to signal acceptance of these terms.
If the user does not agree to the terms and conditions, the website should be designed so that the visitor cannot proceed any further.
Clickwrap agreements are commonly used for accepting the terms and conditions:
* for software updates;
* for online purchases; or
* registration for special access privileges or rights.
Clickwrap agreements are particularly important for e-commerce transactions to limit the possibility of pre-existing offers being made by the customer that could bind the company.
(c) Digital signatures
May be used to ensure the website vistor acknowledges acceptance of terms and conditions.
A digital signature is similar to the clickwrap mechanism. It prevents a user from carrying out an action on the website until they have agreed to the terms and conditions of use. The terms and conditions of use generally pop up in a new window. The difference between a digital signature and clickwrap mechanism is that a user attaches their digital signature to signify their acceptance instead of clicking on a button to accept the terms and conditions. If the user does not agree to the terms and conditions they cannot proceed.
Digital signatures also limit the possibility of pre-existing offers being made by the customer which could bind the company. Digital signatures are generally appropriate for electronic commerce of high value. See Digital Signatures and PKI; Secure Electronic Transactions.
3. Managing legal risk with terms and conditions of website use
To minimise legal exposure, the terms and conditions of your website should clearly state the conditions upon which end users are permitted to use the site. The terms and conditions should include, where applicable, a term:
(a) Reducing your liability to the maximum extent permitted by law. The trade practices legislation prohibits certain types of disclaimers (see Trade Practices and Consumer Protection). Be careful you do not exclude liability to an extent greater than permitted under such legislation.
Common disclaimers may include a disclaimer:
* as to the quality of content;
* as to the availability of goods or services on your web site to certain people or geographical areas; or
* relating to the implied endorsement of links to other web sites.
(b) Indicating how changes to your terms and conditions will be notified to users.
(c) Stating the information on your website is general and for information purposes only and not intended to render professional advice. End users should obtain professional advice in relation to the particular circumstances of their case.
(d) Specifying your rights to reproduce or remove material uploaded or posted to your site.
(e) That you are not liable to readers for information posted to your site.
(f) Specifying that people posting to your website indemnify you for any loss arising from posting that material.
(g) That you are not liable for the actions of users of your website (eg introduced viruses).
(h) Which informs customers to signify their acceptance of all terms and conditions by clicking on the provided button or by applying their digital signature.
(i) Where cookies are utilised by a website, you should advise users of the extent to which cookies are used and your privacy (or cookie usage) policy should be drawn to the attention of users.
Other relevant Articles on this site:
Link or frame a website
Copyright protection of content
Moral right protection of content
Defamation
Trade Marks
Patents
Website development agreement
Content regulation
Encryption of data
Digital signatures
Customer information privacy
Other relevant Fact Sheets:
Consumer Protection
Jurisdiction
Online Contracts
Privacy
End Notes