So, you have your own business hiring vessels out to the public (so we are talking polycraft, kayaks, pedal boats, paddle boards, and so on). Are you protected when things go wrong (when at some stage they will!)? The answer is probably “no”.
Now maybe you are thinking, “What can go wrong?” or “I’ve been doing this for years, and nothing has ever gone wrong!” This article will give you five reasons why terms and conditions, or Ts&Cs, are essential to protect you and your business.
1. CERTAINTY AND TRANSPARENCY
Written Ts&Cs, whether they are on your website or on paper, help to create certainty as to what the agreement is between you and your customer. You can have an oral contract, such as a chat about what the agreement is: i.e. your customer can hire the kayak for 2 hours, for $100, and they must have the kayak back to you by 5pm, and so on. The problem with oral contracts is that you can forget what was agreed, or even have a different recollection to your customer of what was agreed, which can, in turn, lead to
misunderstandings or even an expensive legal dispute. Of course, because the agreement was made orally, there is no way to prove what was actually agreed!
Do not rock the boat. The easy way around this is to have standard Ts&Cs, which clearly set out the agreements that are being made. Most importantly, Ts&Cs are legally binding; they will protect you when things go wrong. So, if you are in the business of hiring vessels out (and other lines of business for that matter), you can have one set of standard Ts&Cs that you use for every vessel you hire out. Simple.
2. COST SAVINGS
But what about the cost? It will obviously cost to engage a lawyer to draw up a set of Ts&Cs specific for your business, covering all of the important points (like payment, hire period, late return, damages, parties’ obligations, insurance, etc.). But you can use the Ts&Cs for every vessel you hire out with peace of mind, knowing that there is a clear agreement in place with your customer.
PhotobyCatalinaYachts ausailmarine.com
Remember as well, it will also cost you a lot less to have a set of standard Ts&Cs drawn up that effectively protect you and your business, than it will to defend an expensive legal claim or costly court case should a dispute arise.
3. LIMIT YOUR LIABILITY
Liability in the event of a breach is another key area where you or your business can be at risk and where you will need protecting. To do this, you can use your Ts&Cs to either exclude liability altogether, or you can instead cap the amount
payable in damages if there is a breach, or you can restrict the remedies available or impose a time frame to claim. Either way, you can ascertain where you stand in terms of liability. If you do not limit your liability, you run the risk of exposing yourself to unlimited liability.
Remember though that Ts&Cs must always comply with the Australian Consumer Law. For example, you cannot have terms in the agreement that will be unfair or misleading, as they will be unenforceable anyway. This area can be quite complicated. If your Ts&Cs do not effectively limit your liability (or you do not even have Ts&Cs), you can find yourself in deep water. That is why it is best to seek independent legal advice tailored to your needs.
4. ENHANCE CUSTOMER SERVICE
Another reason why you should have a standard set of Ts&Cs for your business is that they help you provide good customer service, which is consistently applied to all of your customers. It is key to have a clear set of Ts&Cs that are easy to understand. The Ts&Cs will reassure the customers that you have everything covered, like insurance!
Ts&Cs also set out what will happen in all of those ‘common’ or usual scenarios, where disputes are most likely to arise. You will be able to set out in writing the important points, such as, what will happen if your customer wants to cancel, damages the vessel, or is late in returning the vessel? With clear Ts&Cs, your customer will know what will happen, when, how and why. Clearly setting out the Ts&Cs at the beginning is crucial
to providing good, consistent customer service and to protecting your business. There will be no nasty surprises for you or your customer!
5. THEY HELP YOU COMPLY WITH THE LAW
A good set of Ts&Cs will establish what is called the ‘governing law’ between you and the customer. This means that the Ts&Cs will set out the state laws and rules that will apply. If your business is located in Queensland, then any dispute will be dealt with under Queensland laws and by Queensland courts.
Ts&Cs will also help you and your business comply with the law. One example is, when a customer comes to hire a vessel, you will most probably take their name, address, phone number and even their bank details. All of this information is what is known as “personal information” about your customers that you are collecting, using, storing and hopefully, not disclosing – unless, of course, you have consent to do so or you are
required to do so by law! In light of identity theft and scams, your customers will expect you to handle their personal information securely. As a business, you will be required to comply with the obligations set out in the federal Privacy Act 1988. Watch out, as there are some serious consequences if you breach this law including reputational damage and fines. Ts&Cs will help you set out to your customers what you will use their information for, and how you will protect it. This in turn will help you avoid a breach. That is another box ticked!
So, what next?
If you want to make sure you and your business are protected by having a standard set of Ts&Cs specific to your business needs, or if you already have some in place but are not sure if they are up to scratch, give the team at Pacific Maritime Lawyers a call on 1300 797 627, and we will be very happy to help you out.
By Claire Strodder, Maritime Lawyer
Published in the Jan-Mar 2020 edition.
