All about Terms & Conditions (with template and tips)

In our daily life, Terms and Conditions (“T&C”) can be found everywhere: leaflets, credit card application forms and product instruction manuals. But people don't always read these lengthy clauses. Despite this, T&C are essential protection for businesses and can make or break a business. But how do merchants who do not have a legal background write these important terms and conditions? In this article, we will give you a brief introduction of the functions and contents of T&C. A bilingual template is included at the end for your reference, so that you can write one for your own business.

What are Terms and Conditions (“T&C”)?

Terms and conditions are usually written by the product or service providers and include all matters that customers need to be aware of. They often cover areas such as the use of products and services, personal privacy, legal liability, etc., depending on the circumstances. For example, a common disclaimer will state that the merchant will not be liable for any damages that may arise from the use of the product or service by the customer.

Why do we need T&C?

For merchants, the most important thing is to satisfy all the needs of customers to build a good customer relationship in the long term and maintain business profitability. While it is the responsibility of the merchants to ensure that the products or services provided are of good quality, it is inevitable that some external factors or misunderstandings may lead to customer dissatisfaction or even losses of varying degrees. Under such circumstances, T&C can serve as a basis for mediation between the two parties to clarify any misunderstanding that the customer may have, and to provide reasonable protection for the trader by controlling the scope of liability that the merchants may be subject to.

For example, some outdoor equipment rental merchants will state in their T&C that they will not refund the deposit if the customer is unable to use the equipment due to inclement weather; or that they will not be liable for any loss incurred by the customer if he/she uses the equipment inappropriately. In addition to products or services, many merchants also include terms of use on their websites to ensure that they will not be held liable for any incorrect or outdated information on their websites.

Content and tips on writing T&C

T&C comes in different forms and varies with the industry, nature and location of the business. In general, the content covers:

• Definition of terms used 

• User requirements, such as age or location restrictions

• Copyright information (if any)

• Personal information collection statement

• Conditions of sale, such as return, shipment, cancellation and payment methods

• User restrictions 

• The right to alter the terms 

• Contact information of the business

T&C can be treated as supplementary information and can exempt the merchant from certain legal liabilities. But does it mean that they are a "get-out-of-jail-free card" for the merchant? In fact, whether the terms are valid or not depends on a number of factors; apart from the content, they are also subject to the Control of Exemption Clauses Ordinance (Cap. 71) and the Unconscionable Contracts Ordinance (Cap. 458).

Section 7(1) of the Control of Exemption Clauses Ordinance states that "a person cannot by reference to any contract term or to a notice given to persons generally or to particular persons exclude or restrict his liability for death or personal injury resulting from negligence", which makes it clear that a disclaimers do not exclude liability for death or personal injury to a customer due to the negligence of a merchant. Section 7(2) states that the clause is not binded in such a way if it is reasonable. 

Then what does "reasonable" mean? Section 6(1) of the Unconscionable Contracts Ordinance (Cap. 458) sets out the factors that the court will take into account, such as the bargaining power of the parties, the consumer's understanding and the merchant's marketing practices. If the Court determines that the terms or the circumstances of establishing the contract are unconscionable, section 5 of the Ordinance provides that the Court has the power to refuse to enforce part or all of the terms and to alter the unconscionable parts.

After drafting the T&C, we suggest merchants have it checked by people with legal background to prevent major mistakes that will influence its validity.

T&C template

These general terms and conditions below (the “Terms”) shall apply to sales of Goods by the Seller to the Buyer.
以下一般條款與條件（「條款」）適用於賣方向買方銷售商品。

 1. DEFINITIONS 定義
“Goods” mean the goods and/or services agreed to be supplied by the Seller and purchased by the Buyer pursuant to the Contract. 
「商品」是指賣方同意依合約提供並由買方購買的商品和/或服務。

“Buyer” means the person or company whose name appears on the Order. 
「買方」指名稱出現在訂單上的個人或公司。

“Contract” means the contract for the sale and purchase of the Goods as provided in clause  
「合約」指第 2 條規定的商品買賣契約。

“Order” means the Buyer's purchase order.  
「訂單」指買方的採購訂單。

“Proprietary Information” means any and all information and intellectual property relating to the Goods Including but not limited to patents, designs, drawings, instruction booklets, specifications, circuit drawings, componentry, trade secrets, trademarks and copyright in such information and intellectual property.  
「專有信息」指與商品相關的任何及所有信息及知識產權，包括但不限於專利、設計、圖面、說明書、規格、電路圖、元件、商業機密、商標以及此類信息和知識產權的版權。

“Seller” means seller of Goods.
「賣方」指商品的賣方。

2. CONTRACT 合約
2.1 Contract shall be formed by and upon the Buyer and Seller reach a consensus on the price of the Goods. Each Contract shall be governed by these Terms.
2.1 當買方與賣方就商品的價格達成共識時，合約即告成立。每份合約均受本條款的管轄。

3. PRICES
3.1 The prices quoted by the Seller, unless otherwise expressly stated, do not include any packaging, freight, assembly costs, installation costs, costs and charges of third-party suppliers, insurance or any statutory, sales, value-added tax or VAT, goods and services, or other taxes, duties or imposts, all of which may be added to the prices.
3.1 除非另有明確說明，賣方報出的價格不包括任何包裝、運費、組裝成本、安裝成本、第三方供應商的成本和費用、保險或任何法定的銷售稅、增值稅或增值稅，商品和服務，或其他稅費、關稅或進口稅，所有這些都可能添加到價格中。
3.2 All prices in the Seller's price list from time to time are subject to change without notice.
3.2 賣方價目表中的所有價格如有更改，恕不另行通知。

4. PAYMENT 付款
4.1 The Buyer shall pay the prices due and payable in accordance with the terms of payment as specified in the invoice supplied by the Seller.
4.1 買方應依照賣方提供的發票中規定的付款條件支付到期應付價款。
4.2 If payment of the price or any part thereof is not made by the due date, the Seller shall be entitled to: 
4.2 若未在到期日之前支付價款或其任何部分，賣方有權：
(a) require payment in advance of delivery in relation to any Goods not previously delivered; and/or
(a) 要求對先前未交付的任何商品在交付前付款； 和/或
(b) refuse to make delivery of any undelivered Goods without incurring any liability whatsoever to the Buyer for non-delivery or any delay in delivery.
(b) 拒絕交付任何未交付的商品，且買方無需因未交付或任何延遲交付而承擔任何責任。

5. RETURNS AND REFUNDS 退貨和退款
5.1 Defective Goods may be returned within 7 days from the date of delivery for a refund or exchange.
5.1 有瑕疵的商品可在交貨之日起 7 天內退回並退款或換貨。
5.2 Returns of non-defective Goods are at the discretion of the Seller and can be subject to a restocking fee.
5.2 無瑕疵商品的退貨由賣方自行決定，並可能需要支付退貨費用。
5.3 Returns of Goods that are furnished in the form of services are at the discretion of the Seller. 
5.3 以服務形式提供的商品退貨由賣方自行決定。

6. INTELLECTUAL PROPERTY 知識產權
6.1 The Buyer acknowledges that all Proprietary Information and all right title and interest therein are the sole property of or licensed by the Seller and the Buyer shall gain no rights, title or interest in the Proprietary Information whatsoever. 
6.1 買方承認所有專有信息以及其中的所有權利和權益均為賣方的專有財產或經賣方許可，買方不享有專有信息中的任何權利、所有權或權益。

7. LIMITATION OF LIABILITY 責任限制
7.1 To the maximum extent permitted by law and notwithstanding any provision to the contrary in these Terms, the Seller's total liability under each Contract (whether that liability arises under contract, tort, equity, statute or otherwise) for any loss, damage or expense arising out of or in connection with its performance of the Contract, shall be limited to the purchase price paid by the Buyer to the Seller for Goods covered by that Contract and in no event shall the Seller be liable for loss (whether direct or indirect) of profits, opportunity, revenue, goodwill, use, production, contracts, business or anticipated savings, corruption or destruction of data or for any special or consequential loss or damage whatsoever.
7.1 在法律允許的最大範圍內，儘管本條款中有任何相反規定，賣方在每份合約項下對由此產生的任何損失、損害或費用承擔全部責任（無論該責任是根據合約、侵權行為、衡平法、法令或其他方式產生的）因履行合約或與其履行合約有關的，應僅限於買方向賣方支付的該合約所涵蓋的商品的購買價格，並且在任何情況下，賣方均不對商品的損失（無論是直接或間接）承擔責任。利潤、機會、收入、商譽、使用、生產、合約、業務或預期節省、資料損壞或破壞或任何特殊或間接損失或損害。】

8. DEFAULT 違約
8.1 If the Buyer defaults in any payment due to the Seller or breaches any term and condition of the Contract, or if bankruptcy or insolvency proceedings are instituted by or against the Buyer or the Buyer makes or proposes to make any arrangement with its creditors, then the Seller may, at its option, do any or all of the following without prejudice to any other rights the Seller has under the Contract and without notice to the Buyer including but not limited to:
8.1 如果買方拖欠賣方應付的任何款項或違反合約的任何條款和條件，或者買方提起破產或無力償債程序，或者買方與其債權人作出或擬作出任何安排，則賣方可以選擇執行以下任何或全部操作，而不損害賣方根據合約享有的任何其他權利，且無需通知買方，包括但不限於：
(a)    Cease manufacturing and/or withhold any deliveries of the Goods;
(a) 停止生產和/或拒絕交付任何商品；
(b)    Vary the payment terms so that all monies outstanding under the Contract become immediately due and payable on demand; and/or
(b) 改變付款條件，以便合約下的所有未付款項立即到期並按要求支付； 和/或
(c)    Terminate performance of the Contract and/or other contracts between the Seller and the Buyer.
(c) 終止履行賣方和買方之間的合約和/或其他合約。
8.2 Termination of the Contract shall be without prejudice to any right that may have accrued to the Seller or the Buyer under the Contract.
8.2 合約的終止不應損害賣方或買方根據合約可能享有的任何權利。

9. FORCE MAJEURE 不可抗力
9.1 The Seller's obligation under these Terms shall be suspended where the Seller becomes unable to carry out that obligation in whole or in part, because of any one or more of, but not limited to, accidents, breakage or failure of machinery or apparatus, shortage of manufacturing capacity, withdrawal of business license by the Government, war, riots. Terrorism, sabotage and other labour stoppages, epidemic, national disasters such as flood and typhoon, fire affecting the Seller's operations or the operations of the Seller's suppliers, inability to obtain fuel, power, raw materials, container or transportation facilities, acts of God and acts of Government. In any such event, the Seller shall be entitled to a reasonable extension of its obligations. If the delay persists for such time as the Seller considers unreasonable, it may, without liability on its part, terminate the contract.
9.1 若賣方因任何一項或多項（但不限於）事故、機械或設備損壞或故障、短缺而無法全部或部分履行該義務，則賣方在本條款項下的義務應中止。製造能力下降、政府吊銷營業執照、戰爭、暴動。 恐怖主義、破壞和其他停工、流行病、洪水和颱風等國家災難、影響賣方營運或賣方供應商營運的火災、無法取得燃料、電力、原材料、貨櫃或運輸設施、天災和政府行為。 在任何此類情況下，賣方均有權合理地延期其義務。如果賣方認為延誤持續時間不合理，則可以終止合約，且無需承擔任何責任。

10. GOVERNING LAW AND JURISDICTION 適用法律和管轄
10.1 The Contract is governed by and must be interpreted in all respects in accordance with the laws of Hong Kong SAR. The Contract is not governed by the United Nations Convention on documents for the International Sale of Goods.
10.1 本條款受香港特別行政區法律管轄並在所有方面必須根據香港特別行政區法律解釋。 本條款不受《聯合國國際商品銷售合同公約》的管轄。
10.2 Any claim or dispute arising out of the Contract shall be submitted to the exclusive jurisdiction of the Courts of Hong Kong SAR.
10.2 因本條款引起的任何索賠或爭議均應提交香港特別行政區法院具有專屬管轄權。

11. GENERAL 通用條款
11.1 If any clause or part of a clause is illegal, unenforceable or invalid by a court, that clause or part is to be treated as removed from these Terms, but the rest of these Terms are not affected.
11.1 如果任何條款或條款的一部分被法院認定為非法、不可執行或無效，則該條款或部分將被視為從本條款中刪除，但本條款的其餘部分不受影響。
11.2 The waiver by the Seller of any provision or breach by the Buyer of any provision of the Contract shall not be construed as a waiver of any other provisions or breach of any other provision, subsequent breach of the same or any other provision of the Contract.
11.2 賣方放棄任何條款或買方違反合約任何條款，不得解釋為放棄任何其他條款或違反任何其他條款，隨後違反合約的相同條款或任何其他條款。
11.3 If these Terms are translated into another language and there is any inconsistency between this English version and the translated version, then this English version text shall prevail.
11.3 如果本條款被翻譯成其他語言，且英文版本與翻譯版本之間存在任何不一致，則以英文版本為準。
11.4 The Contract cannot be assigned by the Buyer without the prior written consent of the Seller, which is at the Seller’s absolute discretion.
11.4 未經賣方事先書面同意，買方不得轉讓合約，賣方有絕對酌情權。