Are Terms and Conditions Legally Binding?

Posted on March 30, 2023

Ticking a box to sign terms and conditions is something we are used to doing, whether booking a flight or entering into a business agreement with a supplier or a third party. However, most people tend not to read the small print and often do not realise terms and conditions are legally binding – as a High Court case highlighted.

T&Cs are something every business either has or will have come across. They allow businesses to protect themselves from potential claims and commercial disputes and regulate things like; payment terms, legal limitations, disclaiming liability for failure or delay caused by force majeure events, duties, copyright conditions and the governing law of the contract.

Are online terms and conditions legally binding?

Terms and conditions are likely to form part of a legally binding contract. In any contested case the business owner would need to prove that the customer was aware of and has agreed to the business terms and conditions and taken an active step to do so, in most cases now this is an online click agreement and acceptance and so is easy to prove.

In a High Court case, a director of a tech company had applied online to become a client of a foreign exchange services business. He ticked the appropriate box agreeing to all the terms and conditions set out by the foreign exchange providers.

Part of this was a hyperlink that covered the whole of the business's terms and conditions, in this case, it was 15 pages and 27 clauses. There was also a webpage, and a pdf was additionally provided with a full run down of all the T&Cs.

“A clear and defined set of terms and conditions can help minimise the chance of legal disputes and make it much easier to establish if there has been a breach of contract,” said Chloe Andrew-Willis, from Pearson Solicitors Litigation Department.

Dispute terms and conditions

A dispute arose between the two parties and as part of the case, the director who launched proceedings testified that he had not used the hyperlink, nor the pdf and had not read the terms and conditions provided. It was noted by the High Court that he had completed all the online forms and ticked the T&Cs acceptance box. However, the court found that by ticking the box the director had essentially agreed to the supplier's terms and conditions.

“In this case the customer should have read the T&Cs provided by the business,” added Chloe. “Such clauses become legally binding, even if you have not actually read them, when you tick the box.”

How can we help

At Pearson Solicitors, we handle numerous commercial litigation cases. Our corporate and commercial solicitors can help businesses draft terms and conditions as these should not be a static document. Terms and conditions should change and develop as the business grows to help ensure compliance with legal obligations.

If you have a commercial dispute and are in need of legal advice our commercial litigation solicitors can help. Alternatively, if you are looking to protect your business from disputes our experienced corporate and commercial solicitors are here to help. Contact us today on 0161 785 3500 or email enquiries@pearsonlegal.co.uk.

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.