Do Your Existing Terms and Conditions Still Cover What Your Business Is Selling?

Change is part of running a business.

You might start with one core service, then add another. A one-off product might become a subscription. You might introduce memberships, an app, new delivery options or a completely different way for customers to pay.

The business changes, but sometimes the Terms and Conditions you put in place at the beginning don't change with it.

That can become a problem.

Your terms are meant to set out the rights and responsibilities that apply when someone buys from your business. If they were drafted for an earlier version of the business, there can be a gap between what the contract says and the transaction actually taking place.

So, how do you know when your business has outgrown its existing terms?

What Are Terms and Conditions?

Terms and Conditions are contractual terms a business uses to set out the rules that apply when a customer buys its products or services.

Depending on the business, they might also be called Terms of Sale, Terms of Service, a Service Agreement or a Customer Agreement.

For example, a Service Agreement can cover what you're providing, how and when the customer pays, responsibilities on both sides, intellectual property and what happens if the relationship ends.

For an online shop or other eCommerce business, eCommerce Terms and Conditions may instead deal with ordering, payment, delivery, cancellations and returns.

Having written terms is useful because they help establish what the parties have actually agreed to if a disagreement later arises.

However, simply having Terms and Conditions somewhere on your website doesn't necessarily mean they automatically form part of every customer contract.

It's important that customers have a proper opportunity to see the terms intended to apply before or when they enter into the contract. For consumer contracts, particularly important or potentially surprising terms should also be brought appropriately to the customer's attention.

Why Are Your Terms Legally Important?

Your contract is only one part of the legal picture.

For transactions with consumers, legislation can give customers rights regardless of what your Terms and Conditions say.

The Consumer Rights Act 2015, for example, sets standards for goods, services and digital content. Goods generally need to be of satisfactory quality, fit for purpose and as described, while services must generally be performed with reasonable care and skill.

Consumer contract terms must also be fair and transparent. An unfair term isn't binding on the consumer, and enforcement bodies can take action over unfair terms and notices.

So, your terms can't simply contain whatever rules are most convenient for the business. They need to explain the commercial relationship while still operating within the laws that apply to it.

That becomes particularly important when the transaction itself changes.

You've Added A New Product Or Service

Launching something new doesn't automatically mean you need completely new terms.

The question is whether the agreement you already have actually covers the new transaction.

Imagine a design business that originally only provided bespoke services. Its agreement might cover project briefs, revisions, payment and ownership of the final work.

The business then starts selling downloadable templates.

That creates different questions around how customers can use the templates, whether they can modify or redistribute them, what intellectual property rights they receive and what happens if they cannot access their purchase.

Digital content also has specific protections under the Consumer Rights Act 2015, so moving from services into downloadable products isn't necessarily just another version of the same offering.

The issue isn't simply that the document looks old. It's that important rights and responsibilities connected with the new offering may never have been addressed.

You've Changed How Customers Pay

Payment changes can also affect what your terms need to cover.

Perhaps customers previously paid everything upfront, but you now accept deposits. Maybe you've introduced instalments or recurring charges.

That creates new questions around when payments fall due, what happens if a payment fails and when an ongoing payment obligation ends.

This becomes particularly important when a business introduces a subscription or membership model.

A one-off purchase and an automatically renewing subscription are different arrangements. Subscriptions can involve additional issues around renewal, billing periods, price changes, trials and cancellation.

Dedicated Online Subscription Terms & Conditions may therefore be more appropriate than trying to fit an ongoing relationship into terms drafted for one-off transactions.

There are also significant changes coming under the Digital Markets, Competition and Consumers Act 2024.

The new subscription regime is due to come into force in January 2027. Covered consumer subscriptions will be subject to additional requirements around information provided before sign-up, renewal reminders, cancellation and cooling-off rights.

This includes a 14-day renewal cooling-off period in certain circumstances, such as when a free or discounted trial moves into a paid subscription or certain longer-term subscriptions automatically renew.

So, moving into subscriptions can involve more than simply switching on recurring payments at checkout.

The Way You Deliver Your Product Or Service Has Changed

Sometimes what you sell stays broadly the same, but the way customers receive it changes.

Perhaps consultations that were once delivered directly now take place through an online platform. Maybe customers create accounts, access resources through a portal or use an app.

These changes can create responsibilities your original terms never needed to address.

For example, the agreement might now need to explain account access, user responsibilities, restrictions on platform use or what happens when a third-party service becomes unavailable.

If you've introduced an app or connected platform, Web and Mobile App Terms may be more appropriate for the way customers actually interact with your product.

Not every operational change requires new terms. But if the way you fulfil your obligations to customers has materially changed, it's worth checking whether the agreement still describes what you're actually providing.

You've Changed Your Refund Or Cancellation Process

Your own refund or cancellation process might also change as the business develops.

However, there's an important distinction between your commercial policy and rights consumers have under the law.

The Consumer Rights Act 2015 provides remedies where qualifying goods, services or digital content don't meet the required standards.

There are also additional rules for many contracts entered into online, over the phone or through other distance-selling methods under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.

Businesses covered by those rules must provide certain information before the customer enters the contract, including information about price, payment, delivery and cancellation.

For many qualifying distance contracts, consumers also have a 14-day cancellation period, although there are exceptions and the timing varies depending on what is being supplied.

Digital downloads and streaming services have their own rules. For example, where a consumer wants digital content supplied during the cancellation period, specific consent and acknowledgement requirements apply before they lose the normal cancellation right.

So, changing the refund wording on your website doesn't change the statutory rights that already apply.

Your own cancellation and refund terms need to work alongside them.

You're Selling To A Different Type Of Customer

Who you sell to also matters.

A business might begin by negotiating agreements with other companies and later introduce standard Terms and Conditions for individual consumers.

Those relationships aren't regulated in exactly the same way.

The Consumer Rights Act 2015 regulates the fairness of terms in contracts between traders and consumers. Terms need to be fair and transparent, and a court ultimately determines whether a particular term is unfair.

Business-to-business contracts operate under a different framework. Businesses generally have more freedom to negotiate how risk is allocated, although the Unfair Contract Terms Act 1977 restricts certain attempts to exclude or limit liability and applies a reasonableness test in specified circumstances.

It doesn't simply regulate the fairness of every term in every B2B agreement.

This means terms originally prepared for a negotiated B2B relationship shouldn't automatically be assumed to suit a consumer offering.

Can You Just Update The Terms On Your Website?

Not necessarily.

There's a difference between introducing updated terms for a new transaction and trying to change an agreement that already exists.

For new customers, revised terms can be presented as part of the new contracting process.

An existing customer may already have a contract based on the earlier terms.

Simply uploading a replacement document to your website doesn't necessarily change that existing agreement.

Whether a contract can be varied depends on matters such as what the existing agreement says about amendments and whether the necessary steps have been followed.

Businesses should also be careful with very broad variation clauses in consumer contracts.

A term that gives a business broad discretion to change prices, services or other important parts of the contract can raise fairness concerns, particularly if there isn't a clear reason for the change, adequate notice or a genuine opportunity for the customer to leave the contract without being disadvantaged.

So, a clause saying “we may change these terms at any time” shouldn't automatically be treated as permission to rewrite an existing customer relationship however the business chooses.

Do You Need An Amendment Or Completely New Terms?

Not every change means starting again.

If the underlying relationship is still largely the same and only one part of the agreement needs changing, a Contract Amendment may be enough.

For example, you might change the scope of the service, a payment arrangement or another particular commercial term while leaving the rest of the agreement in place.

The amendment still needs to be made in a legally effective way, taking into account the existing agreement and how it says changes should be made.

Where several parts of the customer relationship have changed, updated Terms and Conditions may make more sense than repeatedly amending an agreement written for a different business model.

What Else Might Need Updating?

Changing your offering can also affect other legal documents.

For example, if a new product or app changes what personal data you collect, how you use it or who you share it with, it may also be time to review your Privacy Policy.

Depending on the change, your website or app terms, refund process, intellectual property arrangements and supplier agreements may also need another look.

It's useful to consider the whole customer journey: what customers are told before purchasing, what they agree to, what happens after payment and what happens if the relationship ends or something goes wrong.

How Often Should You Review Your Terms and Conditions?

There isn't a set rule requiring businesses to rewrite their Terms and Conditions every few months.

A more practical approach is to use significant business changes as a reason to review them.

If the way you sell, get paid or deliver your offering materially changes, ask:

Do the terms customers are agreeing to still describe the transaction taking place today?

If they don't, it may be time to update them.

Need To Update Your Terms and Conditions?

Your Terms and Conditions may need to develop as your business does.

Sprintlaw's legal experts can review your existing terms, prepare a Contract Amendment where only part of an agreement needs changing, or help put appropriate eCommerce Terms and Conditions or a Service Agreement in place where your current documents no longer suit the way you operate.

If you would like a consultation on updating your customer terms, you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.