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Many New Zealand businesses have terms and conditions. However, a wide range of common mistakes are often made in the drafting of these documents. Terms and conditions are often legalistic and difficult to understand. Therefore, businesses can sometimes go a long time before realising that there are important mistakes or omissions in their terms. It is particularly important in that context to try to get the documents right when you first draft them. This article will set out three mistakes to avoid when drafting business terms and conditions, including:

  • not having enough details in your terms; 
  • writing the documents in a way that is too complicated; and 
  • forgetting to update them over time.

Not Including Enough Details

Most terms and conditions may seem overly long. However, it is really important to make sure that your business covers all of its bases in the document. No matter the nature of your business or its operations, a solid terms and conditions agreement is the best way to protect your business from future lawsuits and litigation. If you have not included any important clauses or details that pertain to your business in the terms and conditions, you cannot later rely on the idea that they should have been in there.

Equally, make sure that you are specific in your terms and conditions document. Suppose that you draft the terms and conditions in a way that is vague or otherwise open to interpretation. Again, this may result in less legal protection for your business and its operations. You also want to be specific to dictate best practices and clear expectations. 

You should always get a qualified lawyer to check your terms and conditions to make sure that they are fit for purpose for your business. Do not trust internet templates or examples!

Making the Language Too Complicated

It is important to include the relevant details for your business. However, you should also try to avoid having a document that is too complicated or impossible to read. Terms and conditions are infamous for being illegible and unreadable. Ideally, your terms and conditions would be accessible to anyone who wants to read them. You do not need to have long, complicated or legalistic words in a terms and conditions document for it to be legally enforceable. In fact, unnecessarily complicated terms and conditions can reduce its effectiveness.

Your business’ terms and conditions should be written in a way that the average person or customer can understand. Otherwise, arguably they are not consenting to the terms even if they agree to them. In most cases, you cannot consent to something you genuinely do not understand or are not aware of. 

You should also think about structuring the terms and conditions in a way that makes sense, with shorter paragraphs and clearer language. While, as detailed above, your terms and conditions must set out the relevant details for your business, they can do so in a way that is written in plain English.

Forgetting to Update Your Terms and Conditions Over Time

Finally, you should update your terms and conditions over time. It is easy to forget to do so as terms and conditions are not the most exciting document of all time. However, as your business changes, your terms and conditions should usually change accordingly. For instance, if you have changed address or added a new business location, the terms and conditions should reflect this. 

Ideally, you should ensure that someone in your business reviews and updates your terms periodically to make sure they always remain current. One good practice is to include a statement at the top of the terms and conditions that states when the document was last updated.

Key Takeaways

It is not necessarily easy to draft terms and conditions in a way that:

  • covers off all of the commercial and legal needs of your business; and
  • ensures that an average person could read and understand the terms.

However, a common mistake is not thinking about the process enough. You should ensure that you include all relevant aspects of your business’ operations in the terms and conditions. The document should be legible and understandable, not written in an overly legalistic way. You should also check the document from time to time to ensure that it is still current. If you want to know more about drafting terms and conditions, contact LegalVision’s contract lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

How do you know if you have included enough details in your business’ terms and conditions?

You should get an experienced lawyer to review your terms and ensure that they are fit for purpose, cover off enough details and include relevant clauses for your business. 

What does it mean for your business terms and conditions to be too complicated?

If the average person or customer cannot read or make sense of a terms and conditions document, it is too complicated. The document should be redrafted to be more approachable and legible. 

Do you need to update your business’ terms and conditions over time?

It depends on whether your business’ needs have changed over that time or if there are changes in the law that affect your business. It is a good idea to check and review your terms and conditions at least once per year (and whenever there is a material change in circumstances).

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