Should you use the same terms and conditions worldwide?

WHY ENFORCING T&CS IN AUSTRALIA MAY REQUIRE MORE THAN JUST A GLOBAL TEMPLATE

In Australia, terms and conditions must be enforceable under local law to provide reliable protection when business relationships break down.

While global templates offer consistency, foreign clauses often fail to hold up in Australian courts—especially around limitation of liability, jurisdiction, and consequential loss—making country-specific T&Cs critical for cross-border success.

 

VIDEO SCRIPT

This video, set in the Schönbrunn Castle in Vienna where I’ve had meetings with clients and the Australian Embassy this week, discusses a topic that arises frequently.

• Should you use the same terms and conditions worldwide?
• Should you use country specific general terms and conditions?
• Or is there a way to embrace a hybrid that provides the best of both worlds?

In order to make this decision, it’s important to answer this question. What is the purpose of your general terms and conditions?

There are two main purposes in my experience:

1. The first one is to provide certainty and clarity as to how your business relationship with your customer or supplier will be conducted.
2. Perhaps the more important one, to set out, the terms of the business relationship, so that if it is breached, it can be enforced against your business partner and any damages that you experience caused by the breach can be recovered from them.

When the business relationship goes smoothly, the wording of the terms and conditions isn’t particularly significant. It’s when there are problems that the wording becomes important. In my view, this is when it matters whether the terms are uniform worldwide terms or country specific, because it’s then that the terms and condition are going to be scrutinised outside of your business relationship. One of the most important considerations is where the terms and conditions are likely to be enforced in the event the relationship breaks down.

If you are going to enforce the terms in Australia, then having the applicable law as the law of Ohio or the law of Austria or Italy or Germany is not helpful.

 

Likewise, it is much easier to enforce a clause that excludes consequential loss when it is drafted in a way that the courts in Australia will accept if you need to claim your damages and enforce a judgement in Australia. Further, if the terms and conditions of your agreement are going to be enforced against you by your business partner and that is most likely going to take place in Australia, then it is important to have terms that will stand up in the Australian legal context, particularly if you want to limit your liability and particularly where the damages claimed are significant.

There are some specific terms that frequently cause problems in Australia when generic worldwide clauses are used. These are:

• limitation of liability clauses;
• attempts to exclude;
• consequential loss;
• choice of law;
• jurisdiction clauses;
• warranties;
• retention of title and lien clauses;
• penalty clauses.

 

This is because Australia either has specific legislation which regulates what is permissible in these types of clauses, or because the case law has created precedents regarding precise wording that is considered acceptable for particular types of clauses. Consequential loss is one of these.

 

If you are considering revising your terms and conditions to worldwide terms of conditions, please do not hesitate to get in touch.

 

At Argyll Law we have 30 years’ experience in helping companies outside Australia set up their businesses on the firmest footing. That relationship continues with us providing ongoing advice and support on the ground in Australia.