How To Set Up Terms For A Membership Community

Launching a paid membership or online community is exciting. You might be bringing together customers, students, fans, clients or industry peers, and you want the experience to feel valuable from day one.

At the same time, memberships can get messy quickly if the rules are unclear. What happens if a member wants to cancel halfway through the month? Can you remove someone who is being disruptive? Who owns the content posted inside the community?

Your membership terms and conditions, together with any membership rules, are where you set these expectations upfront. Done well, they protect your business, help members understand what they're buying, and reduce awkward disputes later.

Do You Need Written Membership Terms And Conditions?

Yes, if you're charging for access to a membership, club or community, you should have written membership terms and conditions in Australia. They're the contract between your business and each member.

Even if your community feels informal, you're still selling a service. That means your terms need to deal with things like payment, access, cancellations, member behaviour and what you can do if someone breaks the rules.

Written terms are especially useful if your membership includes:

• Recurring monthly or annual payments
• A private Facebook group, Slack workspace, Discord server or forum
• Online courses, templates, videos, webinars or downloadable resources
• Member-generated content, comments, profiles or uploads
• Different membership tiers or access levels
• Events, challenges, coaching calls or guest experts

Without written terms, you may struggle to enforce your rules. For example, if a member is removed for harassing others but your standards were never clearly stated, they may argue they were treated unfairly or ask for a refund.

Your terms also need to sit alongside Australian consumer laws. The Australian Consumer Law, which is in Schedule 2 of the Competition and Consumer Act 2010, applies to many memberships sold to individuals and small businesses. You can't use your terms to remove rights that the law gives your customers, including consumer guarantees.

What Should A Paid Membership Agreement Cover?

A paid membership agreement should cover what members get, what they pay, how long access lasts, and the rules for using the community. The clearer you are, the easier it's for members to know what they're signing up for.

A good membership agreement usually covers both commercial terms and community rules. Templates can be a useful starting point, but they often miss the details that make your membership different. A lawyer should tailor the document before you use it, especially if you're taking recurring payments or hosting member discussions.

Membership Terms Outline

Here is a practical outline you can use when planning your document:

1. Business Details: State your business name, ABN or ACN, contact details and who the member is contracting with.
2. Membership Description: Explain what is included, such as community access, resources, events, coaching calls or content libraries.
3. Eligibility: Set any age, location, industry, qualification or account requirements for joining.
4. Fees And Billing: List the price, billing cycle, payment method, GST treatment if relevant, and what happens if payment fails.
5. Term And Renewal: Explain whether the membership is monthly, annual, fixed term or ongoing until cancelled.
6. Cancellations: Set out how members cancel, when cancellation takes effect, and whether they keep access until the end of the paid period.
7. Refunds: Explain your refund policy while recognising rights under the Australian Consumer Law.
8. Community Standards: Set rules for respectful conduct, spam, harassment, self-promotion, confidentiality and prohibited content.
9. Moderation Rights: Explain when you can warn, suspend, remove or ban a member.
10. Intellectual Property: Deal with your content, member content, licences and restrictions on copying or sharing resources.
11. Privacy And Communications: Explain how personal information is handled and how marketing messages are managed.
12. Liability Limits: Set sensible limits on your responsibility, while avoiding clauses that are unfair or unlawful.
13. Changes To The Membership: Explain how you may update prices, features, rules or platforms.
14. Dispute Process: Give members a practical way to raise issues before things escalate.

Your checkout process and business terms should also make the membership terms easy to find and accept. For example, use a checkbox that says the member agrees to your terms before payment is taken, rather than hiding the terms in a footer.

How Should You Handle Recurring Billing And Cancellations?

You should handle recurring billing by making the price, billing cycle and cancellation process clear before the member pays. Surprise renewals and difficult cancellations are where many membership disputes start.

If you charge monthly or annually, your terms and checkout page should clearly state:

• The amount the member will be charged
• Whether GST is included
• How often payments are taken
• When the first payment is taken, especially after a free trial
• Whether the membership renews automatically
• How the member can cancel
• When cancellation takes effect
• What happens if a payment fails

There's no general Australian rule that every online membership must give a cooling-off period. However, cooling-off rules can apply in specific situations, such as unsolicited consumer agreements, where a 10 business day cooling-off period may apply. If you use sales calls, door-to-door style selling, pop-up signups or other direct selling methods, get advice before assuming your standard online terms are enough.

Example: Monthly Membership With A Free Trial

Say Jess runs a Melbourne wellness community. Members get a private app group, weekly live classes and a content library for $49 per month. Jess offers a 7 day free trial and then charges the first $49 automatically.

Jess should tell members, before they start the trial, that:

• The trial runs for 7 days
• The member will be charged $49 at the end of the trial unless they cancel first
• Payments continue every month until cancelled
• They can cancel through their account dashboard or by emailing support
• If they cancel on day 10, they keep access until the end of that paid month, unless the terms say otherwise

If Jess hides the renewal details or makes cancellation hard, members are more likely to complain, request chargebacks or raise issues with the ACCC or their state or territory consumer affairs regulator.

Your cancellation process should be easy to follow. A practical approach is to require cancellation before the next billing date if the member wants to avoid the next charge, and to confirm cancellations by email.

What Rules Do You Need For An Online Community?

You need rules that explain what members can and can't do, and what action you can take if someone crosses the line. Online community terms and conditions should be specific enough for you to moderate confidently.

Community standards and membership rules aren't just about being polite. They protect the value of the membership for everyone. If your group becomes full of spam, bullying or off-topic arguments, paying members may leave and your brand may suffer.

Your rules might cover:

• Respectful Behaviour: No harassment, bullying, hate speech, threats or personal attacks.
• Confidentiality: No sharing screenshots, member stories or private discussions outside the community without consent.
• No Spam: No unsolicited promotions, repeated links, affiliate offers or direct messages to sell products.
• Professional Boundaries: No misleading claims, impersonation or pretending to represent your business.
• Illegal Or Harmful Content: No content that's defamatory, discriminatory, infringing, unsafe or otherwise unlawful.
• Platform Rules: Members must also follow the rules of the platform you use, such as Facebook, Discord, Circle or Slack.

Your terms should then explain your moderation options. For example, you may be able to:

• Remove posts or comments
• Ask a member to edit content
• Issue a warning
• Temporarily suspend access
• Remove a member from a specific channel or event
• Terminate the membership for serious or repeated breaches

Try to avoid promising a fixed process for every situation. You may want flexibility to act quickly if a member is threatening others or posting unlawful material. At the same time, your rules should be fair and transparent, so members understand the consequences.

Keep records of moderation decisions, especially where you remove a paying member. Save screenshots, dates, warnings and messages. If the member later asks for a refund or disputes the charge, those records can help you explain what happened.

Who Owns The Content Members Post Or Access?

Your terms should clearly separate your business content from member content, because different rights apply to each. This is one of the most commonly missed issues in subscription community legal terms.

Your business content might include videos, templates, worksheets, articles, frameworks, call recordings, event materials and branding. You'll usually want your terms to say that your business owns or licenses that content, and members receive a limited right to access it for personal or internal business use during their membership.

You may want to restrict members from:

• Copying, downloading or sharing paid resources outside the membership
• Recording live sessions without permission
• Using your templates to create competing products
• Giving their login to someone else
• Scraping, reproducing or republishing your content

Member content is different. A member may own copyright in their own posts, comments, photos, videos or other uploads. If you want to display, repost, moderate, store or use that content, your terms should give your business a licence to do so.

For example, you might need a licence that allows you to host a member post inside the platform, show it to other members, remove it if it breaches the rules, and keep backups for record-keeping. If you want to use testimonials, success stories, screenshots or member photos in marketing, get clear consent rather than relying on broad wording buried in the terms.

Confidentiality also matters. In some memberships, members share sensitive business numbers, health goals, creative ideas or personal experiences. Your rules should say whether the community is confidential, what members can share outside it, and whether you record live sessions.

If your membership deals with personal information, check whether the Privacy Act 1988 applies to your business. Many small businesses with annual turnover of $3 million or less are exempt, but there are important exceptions, including some health service providers and businesses that trade in personal information. Even if the Act doesn't apply, a clear privacy policy is still a good trust signal.

How Do Refunds And Australian Consumer Law Apply?

Your refund policy can set your usual approach, but it can't take away rights members have under the Australian Consumer Law. This means a strict no-refunds clause won't always be enforceable.

Under the Australian Consumer Law, services must be provided with due care and skill, be fit for their disclosed purpose, and be supplied within a reasonable time if no time is agreed. If your membership fails to meet a consumer guarantee, the member may be entitled to a remedy, which could include a refund, replacement service or other fix depending on the problem.

You can still have a refund policy that deals with change-of-mind requests. For example, you might say:

• You don't provide refunds if a member simply changes their mind after joining
• Monthly fees aren't refunded for unused time after cancellation, unless required by law
• Annual members can cancel renewal, but don't receive a pro-rata refund unless your policy allows it or the law requires it
• Promotional or discounted memberships follow the same refund rules unless stated otherwise

Be careful with broad statements like all sales are final or no refunds under any circumstances. They can mislead customers if they suggest ACL rights don't apply.

You should also think about unfair contract terms. Since 9 November 2023, unfair contract terms in standard form consumer and small business contracts can attract penalties under the Australian Consumer Law and the ASIC Act 2001. Membership terms are often standard form contracts, because members usually can't negotiate them.

Clauses that may need extra care include terms that let you change the price at any time without notice, cancel access for any reason without a fair process, keep all fees even where you have failed to provide the service, or vary the membership features without giving members a sensible option to cancel.

The practical goal is balance. Protect your business, but do it in a way that's fair, clear and consistent with what members were told when they joined.

What Else Should You Check Before Launching?

You should check your checkout flow, privacy settings, marketing practices and platform setup before you start taking payments. Your legal terms only work properly if the rest of the member experience matches them.

Here is a launch checklist you can work through:

• Checkout: Make sure members can see the price, billing cycle and renewal terms before paying.
• Acceptance: Use a clear checkbox or similar process so members actively accept the terms.
• Confirmation Email: Send members a receipt and a summary of key access, billing and cancellation details.
• Cancellation Path: Test the process yourself so you know it works and isn't confusing.
• Privacy: Check what personal information you collect, where it's stored, who can access it, and whether you need a privacy policy.
• Marketing: If you send promotional emails or SMS, comply with the Spam Act 2003. Commercial electronic messages generally need consent, sender identification and a working unsubscribe function. Unsubscribe requests must be actioned within 5 working days.
• Moderation: Decide who can remove posts, issue warnings and suspend access.
• Content Permissions: Get extra consent for testimonials, screenshots, photos and recorded calls where needed.
• Platform Fit: Check whether your chosen platform supports your rules, including access removal, data exports and payment records.

Also think about changes over time. Memberships evolve. You may add new tiers, increase prices, change platforms or remove features that aren't working. Your terms should explain how you'll notify members about changes and when they can cancel if they don't agree.

For major changes, giving advance notice is usually safer than changing things overnight. The right amount of notice depends on your membership model, what the change is, and what your current terms say.

Key Takeaways

• Your membership terms and conditions are the contract that sets the rules for payment, access, cancellations, refunds and behaviour.
• Recurring billing terms should be clear before payment is taken, especially for free trials, auto-renewals and annual memberships.
• Online community rules should cover conduct, moderation, confidentiality, spam and what happens if a member breaches the rules.
• Your terms should deal with both your content and member content, including licences, restrictions and permissions for marketing use.
• Your refund policy must work alongside the Australian Consumer Law and should avoid misleading no-refund wording.
• Standard form membership terms need to be fair, especially since penalties for unfair contract terms started applying from 9 November 2023.

If you'd like help with your membership terms, recurring billing clauses, community rules or refund policy, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.