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Importance of Terms and Conditions in Businesses

Need for Terms and Conditions Clause in Websites

Terms and conditions form a very essential part of a business to make sure that the business owners protect their rights. But while creating these terms and conditions it is important that they look into its legality, and enforceability and that those terms and conditions cater to the intended purpose of the business. If not comply with this, the company may face legal challenges and similar consequences.

Therefore terms and conditions form an essential part of any business ensuring that the parties understand their rights arising from the contractual obligations. During the course of business, these contractual obligations are drafted on the grounds of a valid agreement as prescribed by the Indian Contract Act setting up essential boundaries that every contractual principle should hold.

These terms and conditions can be found in the form of a disclaimer or as a link in the websites or provided separately with the product. They are usually found in E-commerce websites, online streaming websites, and software and the user does not hold any capacity for negotiating the terms and conditions but has to accept or has to leave the page. 

Terms and Conditions in Businesses
Terms and Conditions in Businesses

Terms and Conditions as per the Indian Contract Act

The companies and the websites create a legally binding relationship through these terms and conditions in the following way:

  • The user automatically agrees then he browses through the website and navigates through its contents. 
  • Or presses on an agree button which may ask their consent to agree upon such terms and conditions.

This creates a contract and in cases of e-commerce an E-contract with the user. The Indian Contract Act of 1872 governs the law of contract in India in addition the Information Technology Act of 2000 provides for the legal Validity of any contract in India. 

In the case of Trimex International FZE vs. Vedanta Aluminium Ltd, the court held the validity of E contracts in India even on non-attestation of the parties through signature. But while maintaining the interest of business and e-commerce it is also necessary to maintain the interests of consumers therefore essential elements of a valid agreement provided under the Indian Contract Act 1872 must be abided by. 

  • Such as offer and acceptance.
  • Intention to create a legal relationship.
  • Presence of a lawful consideration.
  • The parties should be competent to be a part of the contract.
  • There should be a lawful object and free consent of the parties.
  • The agreement should not be void and should perform necessary legal formalities.
  • There should be the presence of consensus ad idem which means a meeting of minds is an essential requirement to create any contractual liability between the parties.

It is comparatively easier for businesses to maintain these conditions while taking any physical action but e-commerce companies also have to comply with these points to create a valid contract with respect to terms and conditions. They do so through the way of offer and acceptance displayed in the form of terms and conditions on the website to which the users have to agree.

Competency and free consent -These terms and conditions also contain a declaration from the side of the user that they are competent to form a contract through these terms and conditions with the e-commerce company and such consent is freely obtained.

Lawful consideration- Any product or service provided to the user in exchange for the lawful consideration provided by the user fulfills this condition. Some companies provide users with the liberty to choose between essential and non-essential terms and conditions specifically with respect to privacy matters. These e-commerce websites allow the users to make a selection about how much the website could access the information from the user.

Contents of The Terms and Conditions Document

These documents should set out rules as part of the service provider for visiting the website and contain:

  • The competency of the user to enter into such an agreement. 
  • The mode of interaction through the website pertains to the consideration.
  • Privacy policies are the way in which data of the user can be stored on the website for customizing the user’s interaction with the website.
  • The policy with respect to return and any extra charges depending on the product and service.
  • The intellectual property rights binding on the manufacturers and the seller.
  • Provision with respect to liability, warranty, laws applicable, forms of dispute resolution, and limitations of damage.
  • And how the grievances are to be addressed by the website or the company for the service provider.

The terms and conditions which were not provided to the users and the user does not agree upon consciously such as the terms and conditions agreed upon by browsing through the website can be challenged in the court of law.

Any modification in the terms and conditions further in the future to which the user did not consent does not bind the user with any legal liability with the new condition if being imposed upon the user and they can challenge them in a court of law. Any provision that is expressly void according to the Indian Contract Act of 1872 or any such provision that is against public policy.

Reasons for The Need for Terms and Conditions Clause

Prevention of Abuse

As these terms and conditions are a legally binding agreement, necessary information can be provided with respect to the use of the service or product or the website by the user, providing them with important guidelines that the company adheres to. So that such a user can be called upon or legally challenged for abusing any such conditions.

When e-commerce companies act as an intermediate for businesses to reach the consumers these terms and conditions help not only maintaining the interest of the website but the retailers and businessmen carrying out their business through these e-commerce websites. Similarly, websites promoting content creation might include not abusive clause to maintain the integrity of the performers.

Protection of Intellectual Property Rights

These terms and conditions protect the logo, content, design, emblem, or any such intellectual property right that forms a part of the company’s or the website’s market interface. Users are restricted from plagiarizing the content or using any other of such intellectual property for their commercial benefit. 

Termination of Account or Non-Complying With Such Terms And Conditions

The terms and conditions also contain termination clauses that declare that the user’s account can be terminated or such contract from the company with the user can be terminated if he does not abide by the rules provided. In the case of e-commerce websites, the users create their accounts by providing certain credentials. These accounts can be suspended temporarily for a certain period of time or permanently.

Reduce The Owner’s Liability

The terms and conditions provided on the website state the limit of the owner’s liability. It is necessary as the user is notified about how much the owner would be responsible in case of any error. This forms the basis of liability that can be imposed against the company or the website.

It Forms a Governing Law For The Company or The Website

For the proper operation of any unit, it is important that they follow the basic structure of rules and regulations. These regulations are regulated through locus standi providing a greater experience of the user with the company’s other website while protecting the rights on both ends.

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Aayushi Chopra
Aayushi Chopra
Aayushi Chopra is a law student who is interested in creating content on education, lifestyle, law, health, and environment. She enjoys researching different topics and then expressing her views on them.


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