Terms and Conditions for Businesses in the UK: Why Updates Matter in 2025

Terms and conditions (T&Cs) are one of the most important documents a business can have. They create the legal foundation for every transaction, set out the obligations of both parties, and help prevent disputes. In 2025, businesses across the UK are updating their T&Cs in response to new legislation such as the Digital Markets, Competition and Consumers Act 2025 and the Online Safety Act 2023. These changes reflect growing regulatory pressure for businesses to be more transparent, particularly when it comes to subscriptions, pricing, and consumer rights.

Why Do Businesses Need Terms and Conditions?

Without written terms and conditions, a business is exposed to unnecessary risk. Customers may assume they have rights that have never been granted, or a business may find itself liable for losses that could have been excluded. T&Cs serve several critical functions:

• Contract formation – They explain when and how a contract is created. For example, does the contract begin when a customer clicks “buy now”, when the goods are dispatched, or when payment is received? Clear wording avoids disputes about whether an agreement has been formed.
• Payment terms – They set out when payments must be made, what happens if they are late, and how interest accrues. This gives businesses a clear basis for recovering overdue sums while discouraging late payment.
• Delivery obligations – They confirm when goods or services will be delivered and what happens if deadlines are not met. This ensures customers know what to expect and provides businesses with protection if external factors cause delays.
• Limitations of liability – They allow businesses to restrict liability for losses, other than those which cannot legally be excluded (such as liability for death or personal injury caused by negligence, or fraud/misrepresentation). Without such clauses, companies could face unlimited claims for damages.
• Intellectual property rights – As technology develops, particularly in artificial intelligence, businesses are increasingly restricting how their products may be used. For instance, many companies now prohibit their content or software being used to train AI tools such as ChatGPT or Microsoft Co-pilot. This helps preserve competitive advantage and protects valuable IP.
• Force majeure provisions – These clauses explain what happens if events beyond a party’s control (such as natural disasters, strikes, or pandemics) prevent contractual performance. They provide reassurance to businesses that they will not be in breach if unforeseen events occur.
• Governing law and jurisdiction – T&Cs usually specify which country’s law applies and which courts will resolve disputes. For UK businesses, this is often the courts of England and Wales. Setting this out in advance reduces uncertainty if a disagreement arises.
• Subscription and cancellation terms – With the rise of subscription-based business models, it is essential to make clear how auto-renewals work, how customers can cancel, and when refunds are available. This area is under increasing scrutiny from regulators.

By covering these points, businesses create certainty, promote trust, and reduce the risk of costly disputes.

Why Are UK Businesses Updating T&Cs in 2025?

In recent months, businesses ranging from Spotify to Microsoft and HSBC UK and many more have revised their terms and conditions and you may have noticed the influx in your inbox of updated terms. The driving force behind this is legislation designed to give consumers more clarity and protection, particularly in digital markets. Two key statutes stand out: the Online Safety Act 2023, which focuses on the responsibilities of online platforms, and the Digital Markets, Competition and Consumers Act 2024, which introduces stricter rules for subscription services and consumer rights.

As a result, businesses are making changes in several areas:

Subscription transparency

Many businesses now operate on a subscription basis, whether for digital content, software, or financial products. The law now requires companies to make subscription terms much clearer. This includes setting out when auto-renewals occur, how to cancel a service, how refunds work, and warning customers about potential price or tax changes. The aim is to prevent “subscription traps” where consumers unintentionally remain tied into ongoing payments.

Free trial withdrawals

Free trials are a common marketing tool, but they often roll automatically into paid subscriptions. Under the new rules, businesses must make it easier for customers to cancel a trial before charges are applied. This increases transparency and reduces the risk of customers claiming they were misled.

Intellectual property and AI use

With the rapid development of artificial intelligence, many businesses are updating their T&Cs to protect their intellectual property. Companies are restricting the use of their products, content, or software in training AI systems. This not only protects commercial interests but also ensures compliance with licensing obligations and data protection law.

Dispute resolution

Some companies are introducing mandatory arbitration provisions, requiring disputes to go through alternative dispute resolution (ADR) before they can reach the courts. This can reduce legal costs and provide a quicker resolution process, although it is not without controversy in terms of consumer fairness.

Class action waivers

In response to a rise in group claims against major corporations including Sony, Apple, and Google, therefore some businesses are introducing clauses that waive a customer’s right to participate in class action lawsuits. While enforceability in the UK can be complex, businesses are taking proactive steps to manage litigation risks.

What Does This Mean for Your Business?

The recent wave of T&C updates shows that terms and conditions are no longer a “set and forget” document. They must evolve in line with legal changes, consumer expectations, and technological developments.

Failing to update your T&Cs could leave your business exposed to regulatory action, reputational damage, or avoidable disputes with customers. By contrast, regularly reviewing and refreshing your terms not only ensures compliance but also builds trust with your customer base.

Conclusion

With the updates in legislation for consumer and digital law in the UK, 2025 is a turning point for businesses reshaping how they interact with customers, particularly in the online and subscription economy. Well-drafted, up-to-date terms and conditions are now more important than ever.

If your business has not reviewed its T&Cs recently – or doesn’t have any – now is the time to act. Our corporate and commercial solicitors will guide you through the legal process with confidence and clarity.

How We Can Help

At Lawson West, our expert solicitors can advise you on the best course of action and how to overcome any obstacles as they arise.

Our approach is to provide comprehensive support and guidance throughout a deal or transaction. We work alongside you to navigate challenges, answer your questions and ensure a successful outcome.

Please contact us on telephone 0116 212 1000 or 01858 445 480, alternatively complete the free Contact Us form and we will get in touch as soon as possible.