What are the most common mistakes when creating terms and con­di­tions?

The so-called fine print irritates customers and online shop owners alike, yet it’s essential on most websites. Terms and con­di­tions simplify contracts, stand­ard­ise purchases, rights, and ob­lig­a­tions, and provide legal pro­tec­tion for buyers and sellers. But what should they include, why are they crucial, and which mistakes should you avoid?

What are terms and con­di­tions?

Terms and con­di­tions, T&Cs for short, are pre-for­mu­lated con­trac­tu­al terms that one party (usually the seller) makes to another party (i.e. the buyer). Therefore they are typically valid for all trans­ac­tions through the company rather than just for in­di­vidu­al sales. If the seller wishes to amend the terms, the contract partners must be informed of, and accept, the changes before a new contract can be confirmed. Breaching these pro­vi­sions may bring legal con­sequences for the seller, and reg­u­la­tions can vary according to industry. Therefore it’s advisable to consult a lawyer.

In order to ensure the terms and con­di­tions are legally binding, the seller must ex­pli­citly inform the other con­trac­tu­al partner (the buyer) of its contents, which the buyer must also accept. For this reason, making the fine print available on the website is not enough. The seller must also draw the buyer’s attention to them before con­clud­ing the contract. In contexts where this is difficult – such as at cinemas and car parks – it’s suf­fi­cient to clearly display the terms and con­di­tions. In such cases, pur­chas­ing the product or service means that the buyer accepts the terms.

Why are terms and con­di­tions for e-commerce websites important?

Contracts with consumers, for example in the form of sales, are governed by statutory rules such as the Consumer Rights Act 2015 (CRA), which sets out the rights of both parties. Ad­di­tion­ally, by creating terms and con­di­tions, sellers can set their own terms without having to negotiate them with each in­di­vidu­al customer. Clearly written clauses lead to better legal security, since it’s explicit from the outset who has which rights and ob­lig­a­tions. Terms and con­di­tions serve as the crucial legal basis of a contract, es­pe­cially when the con­trac­tu­al partners don’t interact in person, as in e-commerce.

The advantage of the terms and con­di­tions for a seller, therefore, is that the same terms apply for every purchase and to every contract partner (buyer). Nev­er­the­less, a buyer must still accept the terms and con­di­tions contract before they can shop. For consumers, this generally means either reading lengthy and tediously com­plic­ated text or simply accepting the terms, trusting that they don’t contain any un­pleas­ant surprises. For this reason, it’s sensible to read at least the most pertinent points in the terms and con­di­tions and to be aware that certain terms must be included by law.

What you should look out for when you write terms and con­di­tions

The contract and delivery terms, which the customer agrees to prior to purchase, are de­term­ined by the seller. However, this doesn’t mean they have free rein when writing terms and con­di­tions – there are guidelines de­term­in­ing which clauses should be included under the Consumer Rights Act 2015 (CRA) and Consumer Contracts Reg­u­la­tions 2013 (CCR). This covers, for instance, details on who is liable for damages and who has the burden of proof (even for damage after receipt of the product or service). For contracts between traders, stating the place of jur­is­dic­tion is re­com­men­ded to avoid disputes. All terms must be clear and fair—es­pe­cially in consumer contracts under the CRA, where they must be trans­par­ent and in­tel­li­gible to the average consumer.

The following ought to be included in the terms and con­di­tions:

• In­form­a­tion about the seller
• Scope of the contract
• Object of the contract
• Deadlines
• Formal re­quire­ments
• Liability lim­it­a­tions
• Payment
• Delivery terms
• Warranty or guarantee
• Retention of title
• In­form­a­tion about the contract storage
• Data pro­tec­tion (UK GDPR/PECR)
• Language avail­ab­il­ity in­form­a­tion, for in­ter­na­tion­al customers
• Sub­scrip­tion terms, if you offer sub­scrip­tions (the DMCCA in­tro­duces new rules for sub­scrip­tion contracts)

Ac­cord­ingly, writing terms and con­di­tions is subject to par­tic­u­lar guidelines and re­stric­tions. One example of this is that the seller may not insert a general dis­claim­er for new goods, stating that they aren’t re­spons­ible for any defects or damage. Fur­ther­more, any dis­ad­vant­ages from a buyer’s per­spect­ive have to be clearly stated – not hidden.

Under Part 2 of the CRA, terms in consumer contracts are subject to a fairness test; unfair terms are not binding on the consumer. The Com­pet­i­tion and Markets Authority (CMA) can also take action against unfair terms and practices, and under the DMCCA it can impose fines directly. This protects both parties by creating clear rules.

Terms and con­di­tions examples and gen­er­at­ors

It is generally not advisable to create your terms and con­di­tions entirely through automatic gen­er­at­ors or by copying from com­pet­it­ors. Par­tic­u­larly, free terms and con­di­tions gen­er­at­ors often produce documents with vague or overly broad language, failing to cover important details specific to your online shop.

Current paid terms and con­di­tions examples and tools with industry-specific templates can provide crucial guidance and sug­ges­tions, offering a strong found­a­tion for your terms and con­di­tions. However, it’s important to keep in mind that these templates may not be suitable for every business within a par­tic­u­lar industry or legally compliant for your specific op­er­a­tions. For example, UK busi­nesses need to ensure com­pli­ance with laws such as the UK GDPR and the Consumer Rights Act 2015, which may not be ad­equately addressed by generic templates.

Always ensure that the final version of your terms and con­di­tions is tailored to your business and reviewed by a legal pro­fes­sion­al to avoid any potential legal issues.

The most common mistakes when creating terms and con­di­tions

• Ambiguous terms and con­di­tions: Using vague or overly broad language in your terms and con­di­tions, such as unclear clauses regarding can­cel­la­tion policies, return processes, or refunds, can lead to legal disputes. It’s essential that all terms are clear, specific, and comply with the Consumer Rights Act 2015 (CRA), ensuring fairness and trans­par­ency.
• Failure to include contract language in­form­a­tion: Buyers must be informed about the languages the terms and con­di­tions are available in. This is par­tic­u­larly important if your business operates in­ter­na­tion­ally or serves customers in multiple languages.
• Jur­is­dic­tion clauses for consumers: Jur­is­dic­tion clauses that specify a court location for disputes are generally not en­force­able against consumers (B2C) under UK law. Such clauses are mainly relevant in contracts between busi­nesses (B2B). Consumers have the right to bring claims in their local courts.
• Unclear can­cel­la­tion policy in­tro­duc­tion: The can­cel­la­tion (or right to cancel) policy is usually part of the terms and con­di­tions. Adding excessive or unclear in­tro­duct­ory language can confuse consumers. The terms must comply with the Consumer Contracts (In­form­a­tion, Can­cel­la­tion and Ad­di­tion­al Charges) Reg­u­la­tions 2013 (CCR) and be easy to un­der­stand.
• Unclear return shipping costs: Sellers can require customers to pay for return shipping, but only if they clearly inform them about this before the contract is concluded. If this in­form­a­tion is missing, the seller must bear the cost of returning the goods.
• Lack of clear headings and structure: Terms and con­di­tions that are difficult to navigate or lack clear section headings (such as ‘Can­cel­la­tion rights’, ‘Dispute res­ol­u­tion’, ‘Returns’) may be chal­lenged by consumers or courts for being unfair or unclear under UK consumer law.
• Ignoring digital reg­u­la­tions: Failing to comply with recent laws, such as the Digital Markets, Com­pet­i­tion and Consumers Act 2024 (DMCCA), which bans unfair practices like drip pricing and fake reviews, can expose busi­nesses to reg­u­lat­ory en­force­ment.
• Over­look­ing privacy and data pro­tec­tion rules: Not ref­er­en­cing com­pli­ance with UK GDPR and PECR regarding the handling of personal data and cookies can undermine consumer trust and violate data laws.

Please note the legal dis­claim­er relating to this article.