Online Terms And Conditions

It is common for businesses to place their terms and conditions of sale online instead of on the backside of an invoice.  Online terms and conditions of sale will be incorporated by reference into your sale if a few important steps are followed.  First, your terms and conditions have to be disclosed to the customer and agreed to by the customer before the customer either receives the product or service or pays for the product or service.  The terms of sale are set at the time the customer either receives or pays for the product or service.  After a customer receives the goods or services or makes payment, the business is not able to unilaterally change the terms of the sale by attempting to insert an un-bargained for term or condition.  An example would be a customer orders a product, the quantity and price are agreed upon, the business ships the product and in the shipping box is an invoice that contains some new term – such as a 18% interest due if a payment is late.  This new term is not part of the sale because the terms of the sale were agreed to by the parties on the date the customer accepted the businesses offer to sell a product or service.  The new term of charging interest on a late payment will not be enforceable.

A second important issue is that the seller must put the customer on notice of the existence of the online terms and conditions.  This notice has to be conspicuous.  Conspicuous means that the reference to the online terms and conditions is in at least the same size type font as the rest of the document (it is a good practice to place important terms in bold type face or in all caps) and the reference is clearly displayed within the document (this means that it is easy for the customer to see and not buried within the document).  It is best if you provide your customer with a hyperlink where the terms and conditions can be found.  If including a hyperlink is not possible then you will have to provide the web address.  It is important that you regularly check the functionality of the hyperlink and web address.  If the hyperlink does not work or your website is not properly displaying the terms and conditions, then it is more likely than not your terms and conditions will not become part of the transaction.  If you periodically update your terms and conditions, you should date each version and archive each version.  If a dispute does arise and you cannot produce the version of the terms and conditions applicable on the date of sale, then it is likely your terms and conditions will not become part of the sale.

Finally, it is also a good practice to obtain an express acknowledgement from your customer that he or she has agreed to the online terms and conditions.  If your business sells products or services on your website, then the customer should not be able to pay for the product or service without having to click through an “I Accept” box.  Your website should be constructed to capture and save the click on the “I Accept” box.  If you conduct business through a third-party site, such as Amazon or Pay Pal, or you email sale documents, then your sale document should contain the web address that your customer can type into his or her Internet browser in order to obtain a copy of the online terms and conditions.

The law in the State of Ohio is that if the seller has properly incorporated the online terms and conditions into the transaction, then it is presumed that the customer has read and understood the online terms and conditions.  If you follow these few steps then your online terms and conditions will be incorporated into the sale.  Please note that this article is written based on Ohio law.

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Chris Corpus

Founding Partner at Corpus Law Inc

This article does not provide legal advice or create an attorney-client relationship. If you have any questions or would like to learn more about this topic or if you have other legal questions, do not hesitate to contact Chris Corpus, Esq. of Corpus Law Inc at 216-973-2475. Copyright Christopher A. Corpus 2016.