The digital age has significantly shifted the way we do business. The introduction of technologies like the chatbot Chat GPT and marketing tracking tools like Google Analytics, as well as the rise in cybercrime, including malware attacks, fraud, IP theft and data privacy infringements has changed the way we market and sell goods and services. It has also significantly altered the scope of liability and risk involved in online sales transactions.
This has led to the promulgation of various information, technology, and data privacy laws and altered how organisations approach selling online and how they view their risks and liabilities when it comes to their websites and other online platforms.
1. What are Website Terms and Conditions (“T&Cs”), and why do businesses need them?
1.1. When we speak of “Website Terms and Conditions” we are referring to “Browser Terms”. This term, however, is often used interchangeably or as a catch-all phrase to refer to any terms and conditions saved on a website (or similar platform), even though this is not strictly correct.
1.2. Websites will often contain different sets of terms of conditions, which serve different purposes. These different terms and conditions may sometimes also be incorporated under the same single document – which is fine as long as you have legally covered what is required.
1.3. Browser Terms (Also known as “Terms of Use”):
1.3.1. These govern the use of a website by end users and are intended to apply to a broad audience; being any person who browses or uses your website. Their primary purpose is to limit your liability and reduce your risk exposure;
1.3.2. They contain information relating to the ownership and use of a website, as well as its content (including IP protections) and any disclaimers and liability exclusions relating to any harm or damage incurred whilst using the website, whether caused by the website owner or a third party. They generally often also contain rules relating to use of the website and will reference or incorporate a Privacy (and Cookies) Notice;
1.3.3. These types of T&Cs are often “agreed” to through the browser/user continuing to use the website, through what are known as “clickwrap” and “webwrap” agreements. More on this below.
1.4. Privacy Notices:
1.4.1. These govern the collection and use (processing) of personal information on a website. For example, any personal information collected through user account registrations, cookies, request forms or the social media account integrations. Note, if you use Cookies or other similar analytics for the purpose of direct marketing to data subjects, where the end users are not your existing customers, then you will also be required to have a Cookies Notice on your website.
1.4.2. The processing of personal information is governed under the Protection of Personal Information Act 4 of 2013 (“POPIA”), and requires that certain information be made available to users when their information is collected. This includes details on how you collect their information, what you collect, the lawful basis for processing their personal information, what you do with it, whom it may be shared with and the user’s legal rights. These obligations are normally set out in a Privacy Notice.
1.4.3. Due to their nature, particularly where Cookies are involved, Privacy Notices are often agreed to through pop-up “clickwrap” agreements. More on this below.
1.5. General Commercial Terms (E-Commerce Terms)
1.5.1. These apply where you have an E-commerce website. They deal with the commercial or contractual aspects of selling and purchasing goods or services online (versus the use of the website itself).
1.5.2. They contain information relating to the sale and purchase of the goods or service being offered, details on the order and payment processes, as well as the purchase price or fees, any limitation of liability clauses or warranties, the return provisions and how to complete the process through the online platform.
1.5.3. Note, where goods or services are offered for sale or hire through an electronic transaction (such as a website) you are also obliged to comply with section 43 of the Electronic Communications and Transactions Act 25 of 2002 (“ECTA“) which requires that certain mandatory disclosures need to be made by the website owner. These mandatory disclosures are generally included in a party’s E-Commerce Terms and Conditions. See more on this below.
2. Why do we need Website T&Cs?
2.1. Website T&Cs are not strictly mandatory, but they are often used to comply with other legal requirements, such as the ECTA, the POPIA, the Consumer Protection Act, 68 of 2008 (“CPA”) or the National Credit Act, 34 of 2005 (“NCA”).
2.2. The main purpose of Website T&Cs is to enable you to limit your liability and reduce your risk exposure as well as protect your content, maintain better control over your website and help you to gain market trust.
2.2.1.1. Limit liability and reduce risk-you can include disclaimers to limit liability for things such as errors, admissions and/or inaccuracies in your content, any harm caused by third parties (e.g. malware attacks or defamatory statements) and you can even include express indemnifications;
2.2.1.2. Protect your Intellectual Property-you can include clauses to protect the copyright and IP on your website, such as your logos, trademarks and website design;
2.2.1.3. Maintain control over and prevent abuse by users-you can include clauses that allow you to control who can access your services and that allow you to terminate any problematic accounts;
2.2.1.4. Governing Law-you can specify which country’s laws will apply if there’s ever a dispute with a customer or website. This can be important for websites representing businesses with international reach, as complications arise when a site facilitates transactions and other interactions among people from different countries.
2.2.1.5. To Earn Market Trust-amongst end users and fellow service providers or organisations.
3. What should be included in website terms and conditions?
Keeping in mind that these T&Cs are separate and distinct from E-Commerce T&Cs (which address the commercial aspects of online sale transactions), the following clauses are generally recommended to be included in general Website T&Cs:
Acceptance of Terms:
You should include a clause stating that the T&Cs are legally enforceable on the end user, specifying what constitutes their legal acceptance or agreement to the terms (e.g. “your continued use of the website shall constitute your acceptance” or “by clicking Continue you legally agree to be bound”). See more on this below. It is also advisable to have a disclosure around the capacity of the person (that they warrant that they are over 18 and authorised or competent). Depending on the nature of your goods or services you may also need to consider including some disclosure around the use of your website by minors.
Copyright and IP Protections:
You should include a clause that protects your IP, through claiming ownership over your IP on the website and preventing the redistribution or reproduction of your content without your consent. In addition it is recommended you include a Copyright Notice (symbol) in the footer of your website page e.g. “© 2023 [Full Name of Organisation]. All Rights Reserved”. Depending on the nature of the website you may also want to include something to deal with third-party and user-generated content, such as how it can be used and who owns it;
Limitation of Liability and Indemnifications:
You should include clauses that clearly specify the limit or extent of your liability and what you will and will not be liable for, in the case of any claims arising, whether through your or a third party’s acts or otherwise. In addition you can also include indemnifications to protect you in case any claims are brought against you;
Disclaimers/Exclusions:
You should include any disclaimers, specifying any express exclusions or other important information that end users need to be aware of e.g. “use of this website is at your own risk”.
Conduct Rules and Conditions for Termination:
Depending on the nature of the Website you can include a general conduct statement or more detailed rules relating to the use of the website and include provision for you to close or suspend a user’s account.
Jurisdiction:
You should include a clause stating which country’s laws apply to the interpretation of the contract and in the case of a dispute or issue, this is particularly important in the case of cross-border trade arrangements.
Privacy Notice:
You should include a clause referencing (hyperlink to) your Privacy Notice (and, where applicable, your Cookies Notice);
Amendments to T&C:
You should include a clause notifying the end users of your right to amend your T&Cs and obliging the users to regularly check for updates.
In addition to the above, legislation such as the ECTA, the CPA and the NCA may also apply depending on the purpose of the website, e.g. whether it is just to share information, offer goods or services for sale, etc. Such legislation will need to be considered when drafting the terms and conditions.
In particular, Section 43(1) of ECTA is important, “where goods or services are offered for sale or hire” through a website, in such a case the website owner is obliged to make certain mandatory disclosures (which are often set out in its E-Commerce T&CS).
You may choose to include additional clauses, depending on how complex your services are or the nature of the goods in question. For example, certain advertising laws and restrictions may apply to the sale of your goods or services, or additional consideration may be required where goods are targeted at minors. You should always seek legal advice if you’re unsure what clauses you need.
4. How can businesses make sure their website terms and conditions are effective and enforceable? Are the Website T&Cs and Notices binding?
Yes. Generally, website T&Cs are legally binding provided that they comply with the standard principles of contract law. These principles state that in order for a valid contract to arise there needs to be an offer and acceptance, an intention to create a binding relationship and consensus between the parties. The parties must have legal competency and capacity and the contract must be legal.
In order to meet these requirements you need to ensure that your users are made aware of the T&Cs that apply to their use of the website and you must include wording to this effect on your website (e.g. “by continuing to use the website you agree to the terms and conditions” or “by clicking yes I agree to be bound by these terms and conditions”).
Further, under the ECTA a signature is not required in order for an online contract to be valid and binding. Instead “other means from which a person’s intent can be inferred” will also be binding on the person (provided no other law requires a more onerous obligation).
This is where “webwrap” and “clickwrap” agreements come into play and these are generally enforceable.
Webwrap agreements
These types of agreements are commonly used in Browser Terms. Webwrap agreements (also referred to as “browsewrap” agreements) are used to acknowledge the terms of use of a website through the continued use of the website. In such cases, a user indicates their acceptance of the T&Cs by using the website and does not expressly indicate their acceptance of the T&Cs.
It is also common practice for websites to display hyperlinks that redirect users to their T&Cs. Unless prohibited under some other law, such hyperlinks will generally be binding and deemed to have been agreed to (regardless of whether the user read the terms or clicked on the hyperlink) provided that you can show that you gave sufficient notice to your users and that the link was sufficiently clear and distinctive enough for a reasonable person to notice.
In other words, you need to ensure that such hyperlinks are clearly visible on your website, i.e. that they are easily noticeable, displayed in a large and legible font that the user’s attention is drawn to them and not hidden away or illegible.
Clickwrap agreements
These types of agreements are common in E-Commerce transactions and Cookie Notices. Clickwrap agreements require the user to indicate their agreement to the terms through an “opt-in” – usually by clicking “I accept” before proceeding with their activity on the website. These agreements are usually used for more significant agreements or agreements where express or active consent is required or preferred.
Lastly, in terms of Section 12 of the ECTA in order for the lawful requirement that a document must be in writing to be met, the document must be (i) In the form of a data message; and (ii) accessible in a manner usable for subsequent reference. Therefore you must ensure that your T&Cs are accessible in a form so that they can be read, stored and retrieved.
5. Are there any other considerations businesses should take into account when drafting website terms and conditions?”
As a general rule any terms and conditions, particularly those aimed at end consumers, should be written in easy-to-understand and clear language. They also (as indicated above) should always be clearly drawn to the attention of your end users and should be accessible in a form so that it can be read, stored and retrieved.
The exact rules and regulations that apply differ depending on the nature of the business and the goods or services being offered. For example, different laws may apply depending on whether the website is targeted at other businesses or at consumers and whether the website offers the sale of goods or services, if it is a platform for users to upload and share their own or third-party content, or if it is simply an information resource.
Lastly, there will generally always be additional legal considerations to consider if you engage in E-Commerce or if you process any personal information through your website.
6. How can businesses ensure they are compliant with applicable laws when drafting their website terms and Conditions?”
It is always recommended that you seek legal advice if you are unsure what clauses to include and how to legally comply with your obligations, particularly as this area of the law is relatively new and constantly developing.
That said, the most common and applicable pieces of legislation in the context of website terms and conditions and e-commerce transactions, tend to be (but are in no way limited to) the ECTA, the POPIA, the NCA and the CPA. You should also consider any existing binding regulations that apply to your operations and business and consider how these may cross over into the digital space.
7. What are the benefits of having well drafted website terms and conditions for businesses?”
Well-drafted website T&Cs offer many potential benefits to website owners and organisations. They enable you to limit your liability and reduce your risk exposure as well as protect your content, maintain better control over your website and help you to gain market trust.
Stormme Hobson
Stormme has a BA and LLB from Rhodes University and was admitted as an attorney in 2010 after having completed her articles at Bowmans. She continued at Bowmans as associate and then senior associate in its corporate and construction team. In 2014 she moved to BASF Holdings as head of legal and compliance for Market Area Africa. Stormme joined Caveat in 2021 focusing on corporate and commercial work.
For more information about Caveat Legal, or to contact the team, please visit www.caveatlegal.com
