Your Guide to E-commerce Website Terms of Service in Singapore
If you are interested in starting your own e-commerce website, you might want to consider including in your website a Terms of Service, which is an agreement between a website operator (yourself) and a website user (your customer).
The main purpose of a Terms of Service agreement is to clarify the conditions of the usage of the services listed on your website, and to protect you from legal liability. A well-drafted and comprehensive Terms of Service agreement is very important, because you can always refer to it if faced with a legal problem arising from the use of your website.
This guide will cover some of the typical terms that are included in a Terms of Service agreement, as well as the rationale behind the inclusion of some of the terms. The terms that will be discussed include:
- Online store terms
- General conditions
- Accuracy, completeness and timeliness of information
- Modifications to the service and prices
- Products or services
- Accuracy of billing and account information
- Third-party links
- User comments, feedback and other submissions
- Personal information
- Prohibited uses
- Disclaimer of Warranties and Limitation of Liability
- Entire agreement
- Governing law
- Changes to Terms of Service
- Contact information
A template for the Terms of Service agreement is also made available below.
What Terms Should the Terms of Service Contain?
Online store terms
Under this section, you will be setting out the general terms in relation to the user’s use of the online store. For example, a common clause to include is that users acknowledge and represent that they are at least the age of majority when accessing the site, or that as a parent, he/she has allowed his/her child under the age of majority to use the site. This is because under Singapore law, minors under the age of 18 do not have the legal capacity to enter into contracts.
Terms like these are important to regulate the use of the online platform and prevent unnecessary problems that could arise. One example of such a problem might be that of a user seeking a refund, claiming that his/her child had accessed the site and bought an expensive item.
If you have already incurred huge delivery costs, or if making a refund is not possible for some reason, you can then direct the user to the general terms indicating that legally, he/she has consented to his/her child’s use of your website and hence the making of such a purchase.
Instead of being about the use of the online platform, like the online store terms, these general conditions pertain to the use of the services offered by your company.
For example, a few common terms under this section could be to reserve your right to refuse service to anyone for any reasons deemed to be appropriate by you, or to inform users that they are not to reproduce or resell any portion of the services offered.
Accuracy, completeness and timeliness of information
Depending on the nature of your e-commerce business, you might be hosting many different sellers on the same website, making it difficult for you or your team to check that all of the information provided by those sellers is accurate. In this situation, it may be important to include a clause that states that the information provided on the website is for general information only, and that any reliance on the information on the website is at the risk of the user alone.
Another common problem with e-commerce businesses is that information changes very often. Hence, you should also inform users that they should monitor changes on the website. This is because from time to time, information that they see on the website on a certain day might not necessarily be current information if it is in the process of being updated.
Modifications to the service and prices
The main point of this section would be to inform users that prices are subject to change without notice. This is to allow you to have the flexibility to change prices according to market conditions or to suit your business strategy. Additionally, the section should contain a clause that allows you to modify your website’s services at your own discretion.
Products or services
This section can provide a description of the products or services provided on the website, if you have that information readily available and if it is not susceptible to changes. In the alternative, you can include a clause to say that the products or services advertised are subject to changes, and that the description of products or services are subject to change at any time as well.
An important clause to include here has to do with the receipt of payment for services on the website. You should include a term that says that orders will be confirmed only once payment has been received, as well as the steps that will be taken if an error in the price or payment of the goods has been discovered.
Generally, this includes a cancellation policy and an assurance that users will receive a refund. This is important because it allows you to ensure that your products are distributed and services are engaged only when you have received payment, reducing the need to chase users for payment later on.
Accuracy of billing and account information
You should also include a section that informs users that they should update their billing and account information regularly, and check that such information is up to date when they place an order for products or services on your website. This is to minimise cancelled orders as a result of inaccurate billing information.
As with any website available on the web now, you will most likely be providing links to materials from third-parties on your website. It is important to clarify that the third-party links are not affiliated with you, and that you are not responsible for examining or evaluating the content or accuracy of the information on those websites.
This will help minimise your legal liability should complaints be raised as to certain claims made on third-party websites regarding products or services offered on your website.
User comments, feedback and other submissions
Most websites, especially websites that sell products or services, allow users to post comments and reviews for other users to read. However, it is important that you retain a measure of control over what can be posted and read on your website.
For example, you would want to be able to remove content that is deemed to be offensive, obscene or objectionable, and having a clause that allows you to do that can make clear your right to do so.
When accessing a website online, or when buying something, it is inevitable that some personal data is submitted to or through the website operator. Therefore, it is important for you to inform users that their personal information will be managed in line with the law.
Under this section, you should include a list of prohibited website uses or contents. Prohibited items that would typically be included are:
- Using the site for any unlawful purpose
- Violation of any laws
- Infringement of intellectual property rights
- Unauthorised collection of others’ personal information
This section is important because it sets out the parameters for what the website and its contents can be used for, and that if a user engages in any of the prohibited uses, you will be allowed to terminate his/her use of the service or the website.
Disclaimer of warranties and limitation of liability
A disclaimer of warranties and/or limitation of liability clause works to protect you from legal liability that may arise in relation to your website. For example, should a user rely on your website’s content and suffer some monetary losses because the information turned out to be inaccurate, the website operator would be wise to disclaim liability to the user as far as is legally possible.
An indemnity clause will state which party will be required to indemnify the other party if that other party is sued in relation to the services provided. In the case of the Terms of Service on an e-commerce website, the terms should include an indemnity clause where users agree to indemnify the company and its affiliates from any claim or demand by a third-party.
By including a severance clause, you are maximising the chances of the other terms in the contract being enforced, even if one particular term is determined to be unlawful, void or unenforceable.
In that case, we say that the unlawful, void or unenforceable clause has been “severed” from the rest of the contract and does not affect the enforceability of the other material terms in it.
The termination clause allows either party (the user or the company) to terminate the agreement arising out of the Terms of Service at any time. Generally, the user terminates the Terms of Service when they stop using the site or stop using the services provided by the company.
The clause should also provide for the obligations and liabilities under the Terms of Service to survive termination. This is so that if services by your company (such as the fulfilment of orders) have been completed but have for some reason not yet been paid for, the user cannot avoid payment by claiming that he/she has terminated the agreement with the company.
An entire agreement clause simply provides that the contractual relationship between the user and the company is governed exclusively by all of the terms in the Terms of Service. This will include other documents that are expressly referred to in the Terms of Service.
The governing law of the contract is important because it determines which country’s laws are to be used to interpret the terms in the Terms of Service. This will be most important if the interpretation of certain terms is in dispute and must be resolved via a legal forum in the future.
This is because it is possible that the company and users are located in different countries, which may have different laws and regulations. As a result, it may be unclear which legal system governs the Terms of Service.
If the governing law is not expressly provided for, costly and time-consuming preliminary court trials may be necessary to determine the governing law before the parties can even start resolving the legal dispute itself.
Typically, a company has certain choices when it comes to selecting the governing law for its contracts. It could decide to use:
- The law of its place of incorporation (such as Singapore if your company is incorporated in Singapore);
- The law of the place where it provides its services; or simply
- The law that it or its representatives are the most familiar with.
You should consult a lawyer to determine which governing law to choose, based on factors like the nature of your business and scale of your operations.
Changes to Terms of Service
Under this section, you are informing users that you have the right to revise the Terms of Service at any time, and that the Terms of Service visible on the website at any time will be the most current version.
Finally, you should at the very least leave an email contact for users who have any general questions about the Terms of Service and how it affects them, or if they have any specific questions concerning any of its terms.
While it is useful to have a general understanding of Website Terms of Service, you may wish to seek legal advice to ensure that terms and conditions of your website address any specific concerns you may have on matters, such as whether the Terms of Service agreement that you are using complies with consumer protection regulations, or whether its conditions of sale and payment are valid in Singapore and so on.
A corporate lawyer will be able to provide you with specific advice on how to tailor your Terms of Service to suit the needs of your particular business.
Website Terms of Service Template
Need a Website Terms of Service template? You can get one here.
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