Do Your Terms and Conditions Still Match How Your Business Operates?

Businesses change.

You might start with one service, then add another. A one-off product might become a subscription. You might introduce an app, change the way customers pay or start selling to a completely different type of customer.

But the Terms and Conditions you put in place at the beginning don't always change with the business.

That's where problems can start.

Your terms are meant to set out the rights and responsibilities that apply to the transaction you're actually entering into with customers. If the business has moved on but the contract hasn't, important parts of that relationship may no longer be properly covered.

So, when should you take another look at your existing terms?

Why Does It Matter If Your Terms Are Out Of Date?

Terms and Conditions can deal with things such as what you're providing, payment, delivery, cancellations, intellectual property, customer responsibilities and what happens if something goes wrong.

A Customer Contract can bring those terms together and help establish what you and the customer have actually agreed to.

However, the contract isn't the only source of legal rights and obligations.

For many consumer transactions, the Consumer Guarantees Act 1993 (CGA) provides minimum guarantees for goods and services. The Fair Trading Act 1986 (FTA) also prohibits misleading conduct and contains rules dealing with unfair terms in certain standard form contracts.

That means your terms need to do more than describe your preferred way of doing business. They need to accurately reflect the transaction while operating within the laws that apply to it.

If the transaction changes, the terms may need to change too.

You've Added A New Product Or Service

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

The first question is whether your existing terms actually deal with the new offering.

Imagine a design business that originally only provided custom design services. Its agreement might cover project briefs, revision rounds, payment and ownership of the finished work.

The business then starts selling downloadable templates.

There are now different questions to address. How can customers use the templates? Can they modify or redistribute them? What intellectual property rights do they receive? What happens if they can't access the download?

The original agreement might still work perfectly well for bespoke design projects, but that doesn't mean it properly deals with the new product.

The issue isn't simply that the document is old. It's that rights and responsibilities created by the new offering might never have been addressed.

You've Changed How Customers Pay

Payment changes can also affect the customer relationship.

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

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

Subscriptions are a good example.

A customer making a one-off purchase and someone entering an automatically renewing subscription aren't entering exactly the same type of arrangement. Subscriptions can involve additional issues around billing cycles, renewal, price changes, cancellation and continued access.

For businesses introducing this model, dedicated Online Subscription Terms & Conditions may be more appropriate than trying to use terms originally drafted for one-off purchases.

There isn't currently a standalone NZ subscription regime equivalent to the new regimes being introduced in some other jurisdictions, but existing consumer law still applies.

In 2025, for example, HelloFresh New Zealand was fined $845,000 after pleading guilty to misleading consumers into reactivating subscriptions. The Commerce Commission emphasised the importance of transparency and informed consent when customers enter subscription arrangements.

The practical point is that switching on recurring billing can change more than the payment method. It can change what customers need to understand and agree to.

The Way You Deliver Your Product Or Service Has Changed

Sometimes the offering itself hasn't changed much, but the way it reaches the customer has.

Perhaps a service previously delivered directly is now provided through an online portal. Maybe customers create accounts, use an app or rely on third-party software to access part of the service.

Your original terms may never have needed to deal with things such as account access, user responsibilities, acceptable use, platform availability or third-party services.

Not every operational change requires a new agreement.

But if the way you perform your obligations has materially changed, it is worth checking whether the contract still accurately explains what the customer is receiving and what each side is responsible for.

You've Changed Your Refund Or Cancellation Process

Refund and cancellation processes often evolve as a business grows.

You might introduce a cancellation window, change your returns procedure or offer a more flexible change-of-mind policy.

However, there is an important distinction between the policy your business chooses to offer and rights customers already have under law.

Under the CGA, customers can have rights to remedies where qualifying goods or services don't meet the statutory guarantees. Your Terms and Conditions cannot simply remove those rights.

On the other hand, customers don't generally have an automatic right to a refund simply because they change their mind. A business can choose to provide additional change-of-mind rights through its own returns policy.

New Zealand also doesn't have a general cooling-off period just because a purchase was made online. Cooling-off rights apply to particular types of transactions rather than online sales generally.

So, if you change your refund or cancellation process, the terms should distinguish between the commercial policy you're choosing to offer and the legal rights customers already have.

You're Selling To A Different Type Of Customer

Who you're selling to can also affect the legal position.

A business might begin with individually negotiated commercial agreements and later introduce standard terms used across a larger customer base.

Or it might start with consumers and later expand into B2B transactions.

The FTA's unfair contract term protections apply to standard form consumer contracts and also to qualifying small trade contracts.

For small trade contracts, the rules cover standard form agreements that form part of a trading relationship with an actual or expected total value of no more than $250,000, including GST, in any 12-month period.

That threshold relates to the value of the trading relationship, rather than simply the value of one individual contract.

There are also differences between consumer and B2B transactions under the CGA.

Where both parties are in trade, businesses can contract out of the CGA in certain circumstances. The agreement needs to be in writing, both sides must agree that the CGA won't apply, and it must be fair and reasonable to contract out.

That means terms prepared for one customer market shouldn't automatically be assumed to work for another.

Can You Just Replace The Terms On Your Website?

Not necessarily.

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

A new customer can be presented with updated terms as part of entering into a new contract.

Existing customers may already have a binding agreement based on an earlier version.

Replacing a document on your website doesn't automatically rewrite that existing contract.

Whether you can change the agreement will depend on matters such as what the existing contract says about variations and whether the required process for changing it has been followed.

Businesses should also be careful with extremely broad rights to change standard form contracts.

The FTA's unfair contract term regime can apply where standard terms create an unfair imbalance between the parties. That makes a blanket clause saying “we can change these terms whenever we want” something that should be considered carefully rather than treated as an automatic solution.

Do You Need An Amendment Or Completely New Terms?

Not every business change means starting again.

If the underlying relationship is still largely the same and you only need to change one part of the contract, a Contract Amendment may be enough.

For example, you might change the scope of a service or a particular payment arrangement while leaving the rest of the contract intact.

But if several parts of the relationship have changed - perhaps what you sell, how customers pay and how the offering is delivered - repeatedly patching the original contract can make things harder to follow.

At that point, updated Terms and Conditions may make more sense than continuing to amend an agreement written for a different version of the business.

What Else Might Need Updating?

Changes to the customer relationship can have a knock-on effect on other documents.

For example, if a new product, app or platform changes the personal information you collect, how you use it or who you disclose it to, it may also be time to review your Privacy Policy.

Your refund process, intellectual property arrangements, supplier agreements or other customer-facing documents might also need another look.

Rather than reviewing each document in isolation, it can help to look at the customer journey as a whole.

What is the customer told before buying? What are they agreeing to? What happens after payment? And what happens if something goes wrong or the relationship ends?

Those pieces should broadly line up with how the business actually operates.

When Should You Review Your Terms and Conditions?

There isn't a rule requiring you to rewrite your terms every few months.

A more practical approach is to use significant changes in the business as review points.

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

Do the terms customers are agreeing to still describe how the business operates today?

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

Need To Update Your Terms and Conditions?

The contract that worked when your business first launched won't necessarily cover every product, payment model or service you add later.

Sprintlaw's lawyers can review your existing Customer Contracts, prepare a Contract Amendment where only part of an agreement needs changing, or help put updated terms in place where your existing contract no longer suits the way the business operates.

If you would like a consultation on your options moving forward, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.