Terms and conditions for Australian small businesses, a clause-by-clause guide

Somewhere between deciding the business needs terms and conditions and uploading a free sample PDF to the website, most Australian small businesses lose the protection they think they have bought. The moment usually arrives with a template: your web designer asks what terms to put on the new site, a supplier sends their own customer terms and asks whether yours match, or you copy the checkout terms of a business in the same industry because the page looked professional.

Terms and conditions do one job: they set the rules for how customers use your website, buy your products or engage your services. They define the commercial deal, allocate risk between you and the customer, and give you something enforceable when a customer misuses the site, stops paying or damages your reputation. They sit alongside, and never replace, your Privacy Policy, and they operate inside the Australian Consumer Law (Cth) (the ACL), which grants customers some rights that no contract can take away. This guide walks through the clauses that belong in most Australian terms and conditions, what each clause should say, and the traps that make template versions unenforceable.

The clauses that do the work

What you offer, and what you do not

The scope clause defines the product, service or access you are actually selling. It should describe what customers get, any prerequisites such as compatible devices, a safe location or materials the customer must supply, and what sits outside the deal. If delivery timeframes are estimates, the clause should say so in plain terms rather than as a commitment.

The drafting choice that matters most is precision about the boundaries of the offer. A service business that promises "complete website design" in the scope clause will be held to that promise even if the parties privately intended something narrower. A content website should state that information on the site is general in nature and not professional advice. The trap in most templates is a scope clause written for a different industry, which either promises too much or leaves the customer's expectations unmanaged.

How the price is calculated

Set out prices in Australian dollars, whether GST is included (the GST rate is currently 10 per cent), the payment methods you accept, when payment is due, whether deposits are refundable, and what happens on non-payment. If you run subscriptions or auto-renewals, the clause must spell out the renewal date, the cancellation window and how notice is given, because silent auto-renewal is one of the first things a regulator or a court will scrutinise.

Watch for the price variation trap. "We may change prices at any time" reads well to a business owner and badly to a tribunal, particularly for subscriptions where the customer has already committed. If you need to change prices, say when and how the customer will be told, and give existing customers a way out.

Orders, delivery and who carries the risk

For an online store, this clause is the difference between a clean transaction and a dispute about a parcel that never arrived. It should state when an order is accepted, usually on confirmation rather than on the click of the buy button, how backorders are handled, which delivery methods and timeframes apply, and when risk in the goods passes to the customer. A common drafting choice is risk passing on delivery rather than on dispatch, so that goods lost or damaged in transit remain the seller's problem.

If delivery depends on the customer doing something, such as providing measurements or being home to receive the parcel, the clause should say so, and it should state what happens if the customer does not. The delivery timeframes you publish become part of the deal, so an estimate you print in the terms is a commitment you may be held to.

Refunds, returns and the consumer guarantees

This is the most regulated clause in the document. When you sell to a consumer, the ACL supplies automatic guarantees that a contract cannot remove. Goods must be of acceptable quality, meaning fit for purpose, safe, durable and free from defects, reasonably fit for any disclosed purpose, and they must match their description. Services must be provided with due care and skill, be fit for their stated purpose and be supplied within a reasonable time. A term that tries to exclude, restrict or modify these guarantees is void under s 64 of the Australian Consumer Law.

The refunds clause should describe how a customer with a faulty product gets a remedy, and it should distinguish a major failure, where the customer can choose a refund or replacement, from a minor failure, where you can choose to repair. It should also be clear that a change of mind does not attract a refund, because consumer guarantees do not apply when a customer simply decides they no longer want the goods.

The ACCC's 2025 sweep of more than 2,000 Australian retail websites found terms and conditions that could mislead consumers about these rights, including:

Blanket "no refunds": statements that refunds are never available, or not on sale or specialised items.
Time limits on faulty returns: requiring customers to report a fault within a set period, or lose their remedy. One furniture retailer's terms limited claims to 72 hours and drew infringement notices totalling $56,340.
Fees on faulty returns: restocking fees, or delivery fees treated as non-refundable, applied to goods that turned out to be faulty.
Warranty redirection: telling customers the manufacturer's warranty is their only avenue for a faulty product.
Opened or used items: refusing any remedy for goods that had been opened, even where the goods were faulty.

The ACCC sent warning letters to businesses identified in that sweep, and it has backed the message with enforcement: Mazda Australia was ordered to pay $11.5 million in penalties in February 2024 for false or misleading representations about consumer guarantee rights, and in March 2024 proceedings were commenced against Mosaic Brands over terms and conditions published on the websites of eight of its brands.

Warranties and disclaimers

If you offer a voluntary warranty, the ACL prescribes wording the warranty must include, in particular a statement that the guarantees under the ACL apply and cannot be excluded, and that the warranty is in addition to those rights. A template warranty that omits this statement is non-compliant even if the rest of the terms are fine.

Disclaimers are useful for the things you cannot control, such as third-party platforms, user error or the limits of free information. They are not a licence to overstate. A disclaimer cannot cure misleading or deceptive conduct: s 18 of the ACL catches conduct, not just documents, so a bold "no responsibility accepted" line next to a claim you cannot back up will not protect you.

Limiting your liability

Most terms cap liability at the amount the customer paid, or offer re-supply of the goods or services as the limit of your exposure. A cap of that kind is commercially sensible and widely used. What it cannot do is exclude the consumer guarantees, because s 64 and s 276 of the ACL void terms that purport to exclude, restrict or modify the guarantees or the remedies for failing to comply with them. Clauses that purport to exclude liability for death or personal injury caused by negligence are also treated with deep suspicion by courts and frequently fail.

The drafting choice that matters is proportionality. A cap that is grossly out of step with what the customer gets, buried in fine print, will also be vulnerable under the unfair contract terms rules. In a standard form consumer or small business contract, a term that causes a significant imbalance in the parties' rights, is not reasonably necessary to protect your legitimate interests and would cause detriment can be declared void, and since November 2023 proposing or relying on such a term can itself attract penalties of up to $100 million for a company, or three times the benefit gained, or 30 per cent of turnover.

Intellectual property and user content

State who owns what: your branding, website content, product designs and materials are yours, and customers get a limited licence to use them for the purpose of buying from you or using the service. The clause should prohibit copying, scraping and reverse engineering, and the licence should survive the end of the contract.

If customers upload content, such as reviews, photos or testimonials, you need a licence from them to display and moderate that content, plus the right to remove it. A takedown process for infringing or offensive content protects you twice: it manages your own exposure and it gives users a clear path when something goes wrong.

Privacy and data

The terms and your Privacy Policy work as a pair. The terms should reference the Privacy Policy, identify at a high level what you collect, such as checkout details, account information and browsing data, and why, and note the third-party processors involved, such as payment providers or email platforms. The Privacy Policy itself should set out the detail, including how customers exercise their rights under the Privacy Act 1988 (Cth).

The trap is a mismatch between the two documents and the checkout. If your terms promise data will never be shared but your analytics tool shares it, or your policy mentions cookies your site does not actually set, you have created an accuracy problem on two fronts: privacy law and the prohibition on misleading conduct.

Termination, suspension and changes to the terms

Explain when the contract starts, how either party can end it, and your right to suspend an account or refuse service for breach, fraud or abusive behaviour. For subscription services, the termination clause should line up with the renewal and cancellation mechanics in the pricing clause, because a customer who cannot find the cancel button will complain to someone who can.

Changes to the terms deserve their own clause. Reserve the right to update them, but say how customers will be told, and for material changes give notice and an option to cancel before the change takes effect. The trap is the unilateral variation clause written as "we can change these terms at any time without notice". In a standard form contract that clause is a textbook unfair contract term, because it lets you rewrite the deal after the customer has committed.

Disputes and which law applies

Provide a sensible escalation path: good faith negotiation first, optional mediation, then the courts. Nominate a governing law and jurisdiction, usually the state or territory where you operate, so both sides know where a dispute would be heard.

The trap is forum shopping. A clause that sends Australian customers to a foreign court, or to arbitration that is impractical for the amounts involved, is both commercially pointless and vulnerable to attack as unfair. Keep the forum realistic for the customer, because an unenforceable dispute clause is worse than none: it signals that the rest of the terms may not have been thought through either.

How your terms actually become binding

The acceptance mechanism is the drafting choice that decides whether any other clause matters, because a term that never bound the customer is worthless. For signed documents the position is strict: a party who signs a contractual document is bound by its terms even if they have not read them (Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165). For unsigned online terms the rule is different: the party relying on the terms must have done all that was reasonably necessary to bring them to the customer's attention at the time the contract was made, a principle applied to online ticket sales in eBay International AG v Creative Festival Entertainment Pty Ltd [2006] FCA 1768.

In practice that means:

Clickwrap over browsewrap: a checkbox or "I agree" button next to a conspicuous link, required before checkout or sign-up, is the mechanism most likely to hold up. A footer statement saying "by using this site you agree to our terms" is browsewrap, and courts will not assume the customer saw it.
Surface the unusual: restocking fees, auto-renewals and long notice periods should be highlighted near the point of action, not buried in clause 14.
Keep records: store the version of the terms the customer accepted, with a timestamp, the IP address and the tickbox log. Version control decides disputes about what was agreed.
Readable on mobile: if the terms cannot be displayed and read on the phone the customer is holding, the reasonable notice argument becomes much harder to make.

Optional clauses that earn their place

Not every business needs every clause, but the following are worth considering when the trigger exists:

Auto-renewal and subscription mechanics: only if you run subscriptions; state renewal intervals, notice periods and how to cancel in the same clause.
Acceptable use and community standards: if users post content, message each other or interact on the platform, so you have grounds to remove content and suspend accounts.
Chargebacks and payment disputes: for digital goods or high-value services where a customer can dispute a card payment after receiving the product.
Force majeure: for service businesses whose delivery depends on events outside their control, such as weather, supplier failure or platform outages.
Geographic limits: if you only supply within Australia, or only in certain states, say so, so customers in other markets are not promised something you cannot deliver.

Where an Artificer Legal review earns its keep

Most small business terms fail in the same three places: the refunds language, the liability cap and the acceptance flow. An Artificer Legal practitioner reviewing your terms would start with the acceptance mechanism, because there is no point perfecting clauses that never bind. We would then work through the refunds and guarantee clauses against the ACL, redrafting any "no refunds" statements and making sure the remedies described match what the law actually requires. We would test the liability cap for unfair contract term exposure, check that any voluntary warranty wording is compliant, and read the terms alongside your Privacy Policy and your actual checkout so the documents and the customer journey agree.

For anything beyond the simplest one-page use case, tailored drafting or a review of a template costs a fraction of a single dispute, a regulator's warning letter or a penalty. That is the trade worth making before you publish, not after a customer or the ACCC reads your terms more carefully than you did.

What the ACCC reads first in your terms and conditions

If one clause decides whether your terms help or hurt you, it is the refunds clause. It is the most misdrafted clause in Australian small business terms, the one regulators read first, and the one where the ACL does the most damage to overreach. A "no refunds" line does not protect you. It does the opposite, because it converts a customer complaint into a regulator's evidence and can void part of your contract under s 64. The consumer guarantees do not come from your terms, so your terms can only describe them accurately and then run the business to match. Get that clause right, and the rest of the document has a chance of doing its job. Get it wrong, and every other carefully drafted clause is undermined by the part of the document your customers and the ACCC actually read.

The other clauses still matter. Scope, pricing, delivery, liability, IP, privacy, termination, disputes and the acceptance mechanism each manage a different risk, and each should be drafted for your actual business model rather than lifted from a sample PDF. Work through them clause by clause, align them with the ACL and your Privacy Policy, and make acceptance something a customer demonstrably does. That combination, not the template, is what makes terms and conditions worth having.