Summary
- Marketplace terms and conditions establish the legal rules governing buyers and sellers on your platform, limiting your liability as the website host.
- Courts will enforce these documents provided they are reasonable, clear, precise, and agreed to by users.
- Continued use of your website can constitute acceptance of your terms, removing the need for repeated consent pop-ups.
- This article is a plain-English guide to marketplace terms and conditions for Australian business owners operating online marketplaces.
- It has been prepared by LegalVision, a commercial law firm that specialises in advising clients on contract law and online marketplace compliance.
Tips for Businesses
Ensure your terms clearly assign liability to sellers, not your platform. State that continued site use constitutes acceptance. Include rules on prohibited listings, fees, complaints, and account suspension. Review your terms regularly to reflect changes in your platform’s operations or applicable law.
Online marketplace terms and conditions set the legal rules governing how buyers and sellers use your platform. As the marketplace host, this document protects your business by allocating liability to sellers, not to you. This article will explore the requirements of marketplace terms and conditions, so you can determine what you must include in your document.
What is a Marketplace Terms and Conditions Document?
A marketplace vendor agreement aims to outline the rules that apply to sellers to protect buyers. Your business will want to keep site users happy to ensure high traffic to the site and encourage repeat customers. Furthermore, you should also avoid unnecessary legal risk or liability by limiting users to only using your website for lawful purposes.
Regardless of form, a terms and conditions document aims to confirm the legal position between the business hosting the website and the marketplace users. They also provide that continued marketplace use will constitute the purchasers and sellers agreeing to the terms and conditions.
Lengthier versions may also include:
- clarification that it is the user’s responsibility to ensure that access to the website is legal in their country;
- circumstances the website will ban the user; and
- users who send offensive or abusive messages or regularly break the terms and conditions face suspension or account deletion.
Why Are These Types of Documents Useful?
Online marketplaces are similar to physical marketplaces. Customers do not do business directly with the property owner (or the company hosting the website). Instead, they carry out business with the seller utilising that marketplace. Therefore, it is helpful for your marketplace terms and conditions document to have wording that places all liability on the seller using the website (or app), not on your company.
Furthermore, you should also set out the risks the buyer accepts. Once again, these are not the responsibility of the hosting marketplace. In summary, the website host wants to clarify that they simply provide the website, not any binding rights regarding the quality or delivery of purchased goods. This is similar to a mobile phone manufacturer not being responsible for the content of calls made on their handsets. While they provide the technology, they do not influence how their users use the phones.
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Do Courts Enforce Marketplace Terms and Conditions?
Courts tend to recognise these documents as a type of legal contract. In this way, they will enforce them within a dispute as long as the document is:
- reasonable;
- clear;
- precise; and
- the user agrees to them.
The requirement of the user’s agreement explains why most online marketplaces state that continued website use constitutes acceptance of the terms and conditions. You do not want to irritate customers by having a pop-up window asking for consent to the T&Cs every time someone enters. By including a term that website use establishes acceptance of its T&Cs, your business can avoid this issue. Similarly, the issue of whether the document is reasonable can be contentious. Generally, if the wording is clear and does not contain unfair or absurd rules, it will likely be reasonable.
Key Takeaways
To summarise, marketplace terms and conditions documents aim to provide website or app users with information about their legal rights whilst using the company’s online services. Your company benefits from the document by setting clear rules you can refer to in any future legal dispute. The document essentially acts as a user rulebook whilst using your website (or app). Because of the need to tailor the document to meet the needs of your website, it is worth considering professional drafting of the document for your online services.
LegalVision provides ongoing legal support for businesses through our fixed-fee legal membership. Our experienced e-commerce lawyers help businesses manage contracts, employment law, disputes, intellectual property, and more, with unlimited access to specialist lawyers for a fixed monthly fee. To learn more about LegalVision’s legal membership, call 0808 196 8584 or visit our membership page.
Frequently Asked Questions
Does my company’s website have to use a marketplace terms and conditions document?
No. However, for the above reasons, having this document is highly recommended and can be helpful in future court action relating to your website (or app).
Can a court refuse to enforce the wording of a marketplace terms and conditions document?
Yes. However, judges only tend to avoid enforcement of intentionally misleading wording or seeking to take unfair advantage of the user.
Who bears liability for product quality or non-delivery in an online marketplace?
The seller bears liability, not the marketplace host. Your terms and conditions should include wording that places all liability on the seller using the platform, making clear that you simply provide the website and are not responsible for the quality or delivery of goods sold through it.
Do marketplace terms and conditions need user agreement to be legally enforceable?
Yes, courts require that users agree to the terms for them to be enforceable. Most marketplaces address this by stating that continued use of the website constitutes acceptance of the terms and conditions, removing the need for a pop-up consent window on every visit.
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