If your business provides goods and services to customers, it is a good idea to have terms and conditions as part of your transactions. They can protect your business against liability, and they clarify both your own and the customer’s obligations in the deal. But, your terms and conditions will depend on whether you run a marketplace or a business. Or in some cases, you it may be both. These classifications depend on how you are interacting with the consumer. For example, are you providing goods or services directly, or are you the middleman in a transaction between two parties? This article will explain what the difference between the two are, as well as explain what each may contain.

What Is the Difference Between a Marketplace and a Business?

In a typical business, you are the one providing the goods and services for the customer and have a direct transactional relationship with them. This means your customers would seek remedies from you if:

  • your products are faulty; or
  • your services are not up to the standard you promised.

A marketplace is an online platform that provides a space for others to conduct business transactions of their own. You act as the middleman between these transactions and do not have any direct role in the deal itself. You shift the responsibility of managing the transaction to the vendor. They are responsible for making sure that the buyer receives the goods or services they provide.

Some online entities will provide a marketplace for others to sell and buy goods and services, while also offering their own goods and services on the platform. In that case, you would need both kinds of terms and conditions. You would not be liable for transactions between the private sales between other parties using your online platform, but you would be responsible for your own.

The key is whether you have direct contact with the customer in the transaction. If you do, then your business terms and conditions would apply. If you are just matching two parties and they perform a transaction, then the standard marketplace ones would.

What Are Marketplace Terms and Conditions?

Some popular online marketplaces you may be familiar with are Mighty Ape, Trade Me, and Airbnb. All three of these platforms allow transactions to occur between private individuals. Your marketplace may be for the specific sale of certain kinds of goods, or a platform where you can enlist someone’s services. For example, you may run a website where people can find babysitters to look after their children or one where they can hire tradespeople that can perform specific tasks. 

Some clauses that your marketplace terms and conditions could cover would include:

Dispute Resolution

If a transaction between the vendor and purchaser goes wrong you should outline whether your marketplace has a way to solve this problem, such as a complaints process.

Marketplace Fees

You may charge a fee to be a seller on the site or claim a part of the profits of any transactions.

Marketplace Liability

You may shift your accountability to the parties in the transaction themselves so that you do not have legal responsibility the deal goes south.

Intellectual Property

If the marketplace uses any of your intellectual property, such as logos or trademarks, you would usually have a clause permitting sellers to use that logo to a certain extent.

It would also be a good idea to include a privacy policy.

What Are Business Terms and Conditions?

A business’s terms and conditions outline the rights and obligations of both you and your customers that you have a direct relationship with. You are in trade with a customer, so New Zealand consumer law would also apply to your transactions.

Some examples where you would need business terms and conditions would be if you:

  • had a business selling your handcrafted goods online;
  • provide a consulting service; or
  • are a software-as-a-service (SaaS) provider.

Your business terms and conditions would cover what you expect from the customer, as well as what the customer can expect from you, and applicable law. This may include:

  • any delivery costs;
  • if any warranties apply;
  • the liability of you as a seller or provider of a service;
  • how payment happens; and
  • a returns and exchanges policy.

Key Takeaways

It is important to have comprehensive terms and conditions for your business so that your interests are protected, and it shows that you are also aware of your obligations to the consumer as a seller. The terms and conditions for a marketplace and a business differ, mainly in terms of how they function. The marketplace does not interact directly with the customer, so those terms and conditions reflect that. In contrast, business terms and conditions will cover the exact details of a transaction with a customer. If you would like more information or help with your terms and conditions, contact LegalVision’s commercial contract lawyers on 0800 005 570 or fill out the form on this page.

FAQs

What are terms and conditions?

Terms and conditions are a document that sets out the rights and obligations of you and your customers. They are a way of protecting yourself from liability and indicating to the customer what requirements are attached to a transaction.

What are marketplace terms and conditions?

Marketplace terms and conditions are rules that apply to transactions that happen on a marketplace. This is an online platform where users may sell and buy goods and services from each other, and the marketplace is not a direct party to those transactions. So, the terms and conditions reflect that.

What are business terms and conditions?

Business terms and conditions are a sale document that outlines what each party agrees to when they complete the transaction. This only applies to the direct parties of the transaction, the vendor and the purchaser.

Do I need terms and conditions?

Terms and conditions are a good way of limiting liability and protecting your interests because both parties agree to them at the time of your transaction. So, if something goes wrong, you can refer to the terms and conditions to see what you agree to and what your rights and obligations are.

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