Cloud Web-based ERP SaaS Software & GST
All transactions happening online are contracts and are governed by the Indian Contract Act, 1872 and also by Section 10A of the Information Technology Act, 2000. When a customer uses the service of a website, online service or an e-commerce entity, a relationship is created between the two that is governed by the Terms of Service.
All the contracts on websites and e-commerce sites are standardised and tailored, and there is no scope for any negotiation or bargaining, since they are of the nature of ‘either take-it or leave-it’. But more often than not, some of the terms of these contracts are unenforceable due to being unreasonable. Many a time, Courts reject such terms and conditions. Hence, it is of great importance that the service providers of the e-commerce entities make the Terms and Conditions in such a way that the customer understands it and then agrees to enter into the contract.
How To Make The Terms And Conditions And Enforce Them?
If you are an e-Commerce entity like a Website, Online Seller, Service Provider, Software provider, Website Developer, etc. you have to be very clear about the terms and conditions you include in your service contracts with the customers. You need to follow these steps:
1. Draft the Terms and Conditions with clarity. Avoid any unreasonable clauses and conditions.
2. Provide time to the customer to read by scrolling down the terms before (s)he clicks on the “I Agree” button. Don’t make it hard to read the terms.
3. Any important terms and conditions should be placed close to the “I Accept” button and should be concise.
4. It is always better to place the one-sided clauses such as Arbitration or Disclaimer of liability or limited liability, etc. to the end of the document.
5. Make it mandatory to read Terms and Conditions and then click “I Agree” before they use your services. This may negatively impact your “conversion rate”, but yet, it is a safe bet. If you cannot make this explicit, you should at least make it clear that they agree to your Terms by using your website or services.
What Should Be Included In The Terms And Conditions?
An effective draft of the Terms and Conditions must have these essential details:
1. The name, address, contact details and type of service or product of the e-commerce entity should be correctly mentioned. For Eg. if it is a Website, it should clearly mention the services provided by the Website. If it is a software provider, then it should clearly mention what is the nature and use of the software.
2. The charges and rates of each service should be clear. Payment options should be easy and genuinely protected.
3. Shipping policy
4. Returns, refunds and exchanges
5. Liability of the website when website goes down due to server issues
6. Errors and omissions
7. Information provided in blogs, articles and learning center not to be considered as a professional advice.
8. If there is any change in any of the terms or conditions, then it should be brought to the notice of the customers in a prominent manner and also the customer should be given a chance to accept or reject the new term. for Eg. pop up boxes with “Dismiss” or “I Agree”.
9. Avoid unreasonable and illegal clauses. Also mention the consequences of using the services or platform for any unlawful or obscene or prohibited or anti-national acts or reasons by the customers.
10. Since the sites are governed by the Indian Contract Act, a minor cannot be a party to the contract. Hence always mention that the services are available only to the persons who have attained 18 years of age.
11. The Limited liability clause, the Arbitration clause are all one-sided clauses and sometimes the Courts tend to reject these if found gravely unreasonable. Hence be cautious in framing such clauses.