Articles > Contracts

What happens if I agree to T&Cs without reading them?

December 22, 2022   Desmond MaPhilip Evangelou

You see an intriguing ad online about the incredible deal a company has for its Christmas sales. You search up its website or press its link and decide to purchase the deal. You select the item, scroll down, put in your credit card information … Everything is going good thus far. Then, a checkbox comes up requiring you to stop in your tracks.

“I agree to the terms and conditions” … 

In the haste of Christmas shopping you accept quickly without reading the terms set out. You later realise that the supposed ‘incredible deal’ is not so incredible after all … 

Perhaps you are wanting to start a new company or create a new deal yourself and are uncertain as to the legal implications of T&Cs.

I’m sure most readers would have encountered a similar experience with T&Cs. In fact, a survey from Deloitte has suggested that over 90% of consumers accept legal terms and conditions without reading them.

So, what are T&Cs? Do I really have to read them? Am I bound by them? If I’m operating a business, what T&Cs should I include? This article seeks to answer these questions. 

For a consumer: What happens when I accept Terms and Conditions?

A contract is a legally enforceable agreement made between two or more parties. As mentioned, T&Cs are a subset of such contracts. So, when you click ‘I agree’ on a website, you have entered into a contract and are bound by its terms, even if you do not read them.*

*Terms and conditions apply: there are protections offered to the consumer… These are discussed in the business section of this article. 

For a business: What should I include in my Terms and Conditions?

Terms and Conditions are paramount for businesses as they can prevent unwanted and expensive legal disputes. T&Cs constitute a legally binding document and generally ensures sales go smoothly by minimising misunderstandings between a business and its consumers. 

A well drafted terms and conditions agreement may contain information including:

  1. Australian Consumer Law liabilities
  2. Disclaimers
  3. Payment terms
  4. Delivery of products
  5. Guarantees/warranties
  6. Service/product description
  7. Intellectual property rights
  8. Dispute resolution processes

Importantly, T&Cs must not remove statutory consumer guarantees, such as those outlined in the Australian Consumer Law. Otherwise, the law does not recognise an effective contract, and you cannot hold a consumer to any obligations outlined in the T&Cs.

To ensure you can enforce your T&Cs:

  1. Require the user to ‘accept’ the terms and conditions via a check-box;
  2. Require the user to have scrolled through the terms, and ensure all terms are reasonably accessible;
  3. Make clear any unusual terms that would not be in a standard-form contract;
  4. Use clear language to signal that a legally binding agreement would be formed upon acceptance.

A business must comply with the Australian Consumer Law guarantees, which cannot be taken away by the T&Cs of a contract. 

  1. T&Cs must not contain unfair terms
    1. If a term is an unusual one, different/additional steps must be taken by the business to bring a clause to a consumer’s notice. For example in Oceanic Sun Line Special Shipping Company Inc v Fay [1988] HCA 32, an exclusion term on a cruise ticket was held to be unenforceable because there was little opportunity for the passenger to have read, or even become aware of the existence of the term.
  1. T&Cs must not remove rights to the following guarantees:
    1. Acceptable quality of goods
    2. Goods & services that are fit for a particular purpose
    3. Goods that match a description
    4. Goods that match a sample or demonstration model
    5. Due care and skill for services
    6. Services provided within a reasonable time

Overall, T&Cs must be drafted carefully and should be tailored to a specific company or business. 

If you need help with drafting or reviewing your T&Cs, our experienced contract lawyers can assist as part of our subscription membership or as a one-time review and registration procedure. Please contact us today at 1300 337 997 or through the contact form below!

About Desmond Ma

Desmond MaDesmond is currently completing his Commerce and Laws degree at the University of Sydney. He is interested in all things commercial law including finance/banking, franchising, property, commercial contracts, and eCommerce.

About Philip Evangelou

phillipPhil is a director at OpenLegal. He has over 16 years experience working in private practice and in-house counsel in Sydney and London, giving him expertise in employment law, IP, finance, leases, dispute resolution, insurance and contracts.