Important clauses in a ‘Terms of Service’ Agreement for E-Commerce Websites

The E-commerce industry in India dates back to the year 1999 when IndiaPlaza.com was established. It marked an epoch to the establishment of the e-commerce industry in the country. Since then, the e-commerce industry has flourished with new age e-commerce companies like Flipkart, Amazon, and Snapdeal introducing strategies like Cash-on-Delivery and establishment of their own logistic chain to supplement their customer base. The growth of e-commerce industry can be attributed to urbanization, increase in the number of mobile and internet users.

Important clauses in a ‘Terms of Service’ Agreement for E-Commerce Websites

 

The E-commerce industry in India dates back to the year 1999 when IndiaPlaza.com was established. It marked an epoch to the establishment of the e-commerce industry in the country. Since then, the e-commerce industry has flourished with new age e-commerce companies like Flipkart, Amazon, and Snapdeal introducing strategies like Cash-on-Delivery and establishment of their own logistic chain to supplement their customer base. The growth of e-commerce industry can be attributed to urbanization, increase in the number of mobile and internet users. As the e-commerce market is developing at a rapid rate, it becomes imperative for an e-commerce company to formulate a legal strategy to deal with regulatory matters and possible litigation from customers, suppliers and other partners.

A good terms and conditions for e-Commerce will lay out the agreement shoppers are entering into when they buy from your store. Ultimately protecting business and helping to resolve any issues that may come up. A detailed, easy-to-find set of terms and conditions (or terms of service) that protects both you and your shopper is, therefore, one of the most important elements of online store. When generating terms and conditions template, one should include the minimum T&Cs requirements, have a clear understanding of the technical requirements needed to implement your policy, and make sure the text is carefully crafted while still easy for shoppers to understand.

Important Clauses for E-commerce Websites:

  • Customer rights and responsibilities

Setting out customer's rights and responsibilities is one of the most important clauses in Terms & Conditions for any e-commerce store, as customers are becoming more educated and more aware of both their rights and the companies they purchase from. If companies neglect to add or cover this type of clause, it can depersonalize your store and make it seem less customer friendly. This clause sets out the basic rights of the customer to be provided with what they paid for and to be informed of any changes to their purchases. This shows respect for the customers and builds trust in the customer relationships with you.

  • Data Protection Disclaimers/ Privacy& Security

Not to be confused with standalone privacy policy, an effective e-Commerce term of service should include your privacy and security terms. This data protection/privacy clause should clearly state what personal information of your consumer you use and store, and how it is protected. This clause deals with the legality of your standalone privacy policy, including things like how your store brand handles things like security control, privacy policy changes and lists of legal disclosures.

  • Pricing and Payment Terms

This is where you outline how payments are made when a shopper purchases a product from your store, and includes the terms and conditions involved in payment. In other words: the full payment needs to be made by [payment term], after which orders will be dispatched. This can also include special fees or billing charges, shipping taxes and more that may be relevant. Your terms and conditions should also link to your return and refund policy, so users can easily find the details of your returns process. If you decide not to offer refunds, link to your no refund policy or all sales are final policy instead.

  • Intellectual Property Rights

Intellectual property refers to your business’ trademark and copyrighted content, including images, names, logos, patents, videos, and designs. This clause lists the materials that belong to your business and outlines rules and restrictions for the use of your materials by outside parties.

  • Limited Liability

A liability disclaimer is a statement from your business that denies responsibility for damages that your visitors may suffer as a result of using your service. This clause protects e-Commerce business owners like yourself from liability beyond the transaction, and will also outline warranty information and other limitation disclaimers. In layman’s terms, this is where you state that your store is not responsible for any liability, loss, personal injury, damage or expense that the customer may suffer after the transaction.

  • Dispute Clause

Another must-have clause in your e-Commerce terms and conditions is the dispute clause. This clause outlines how conflicts are dealt with and resolved, and by which law (location) the dispute will be handled. In other words, if your business is located and operated out of the US, then US law and dispute practices would apply. If you’re in the India, then your terms and conditions need to state that disputes will be handled by the Indian legal system and follow the dispute law of the Indian.

  • Third-Party Link

Another important addition to in terms and conditions template for e-Commerce is the clause that outlines external or third-party links. Simply put, this clause will state that third-party links have been included on your site for your site visitors’ benefit, but that you don’t have any control over the content on those pages.

  • Amendment of terms

Your "Terms" page also needs to cover situations where you want to amend your Terms and Conditions. Most websites use what is called a unilateral amendment clause in their Terms and Conditions agreement. This is when one party (you, the store owner) can make changes without your customers having a say or negotiating anything. These clauses are enforceable as long as: (i) The customer agreed to your Terms & Conditions agreement

(ii) The customer was given reasonable notice of any changes in the agreement

(iii) The customer continues to use your service/shop at your store and you're continuing to perform the service/store

Research by 

Sameeksha Shukla

 BB.A LL.B (Hons.) specialization in Corporate Law ( 5th year)