When you are launching a startup, you need to take a lot of steps to make sure that you successfully get your business off the ground and set it on a path that will bring you profit and help you meet the needs of your future customers. One of the most important steps to take when launching a website or a mobile app is creating terms and conditions and privacy policy agreements.

These legal agreements are incredibly valuable for both you and your customers, because not only do they inform people about everything that they are agreeing to when they start using your services, but they also protect your company against legal claims.

However, many website and mobile app owners don’t quite realize the difference between terms and conditions and privacy policy agreements and they don’t really know how to draft them, so they end up making their business vulnerable. Since they have different purposes, you need to make sure that you fully understand what each of them is and why you really need them, so read on.

What is a privacy policy?

A privacy policy agreement is a legal document that informs your users about the collection, storage, sharing and use of their personal information. This is required by law, so you should never skip this step before you actually launch your website or mobile app.

If you collect, store and use any kind of personal information from your website or mobile app users, you must create a proper privacy policy agreement in order to let them know that you will collect and use that information. It should be provided to them through your website or the app before they actually start using them.

What exactly is meant by “personal information”? Personal information includes your users’ names, addresses, email addresses, IP addresses, date of birth and credit card information – anything by which your users can be identified.

A privacy policy should not only merely inform your users of the fact that their personal information will be collected and used when they start using your services, but it also needs to let them know exactly what information will be collected and how, as well as how and for what purposes it will be used. For instance, you may collect their email addresses, so that you can send updates about your products or services.

Your privacy policy also needs to let your users know whether or not all the collected information will be shared with some third parties, as well as whether or not using your website or mobile app will result in some data being stored on your users’ computers or mobile devices (for instance, cookies).

Privacy policy

It is very important to note that you should have a privacy policy agreement in place even if you collect only non-personal information from your users. That kind of information includes their zip codes, the pages that they visit on your website, the web browsers and devices they are using to visit your site – anything that cannot be used to identify your users.

Why is a privacy policy so important? Apart from being required by law (although not in all countries, but still highly recommended), a privacy policy comes down to the question of privacy, obviously. You need to show your users that they can trust you and that you will handle all of the collected and stored information with the utmost care.

Therefore, the main purpose of this legal document is protecting your company against any kind of legal liability. Even if you don’t collect any kind of information, your users need to know that, because you certainly want them to feel safe when using any of your services. It will help you build trust with them and inspire their loyalty.

If you don’t collect any information at first, but choose to start doing it after a while, make sure that you update your privacy policy and let your users know in a timely manner. This means that you need to inform them about the update in advance, so that they can decide whether or not they want to continue using your services.

What are terms and conditions?

A terms and conditions agreement (also known as a Terms of Use or Terms or Service agreement) is a legal document that sets out the rules, guidelines and requirements that your users must agree to abide by in order to be able to use your services.

Therefore, in order for people to use your website or mobile app, you need to clearly state what they need to do if they want to use them, as well as what you will do in case of some violations of the rules that you lay out in the agreement.

Your terms and conditions agreement should include your copyright policy, your billing policy, subscription policy (especially important for SaaS companies), returns policy, (for ecommerce businesses), potential warranties on your services, potential modifications of your services, and how exactly your users may use your website or mobile app.

This agreement should also include what will happen if a user doesn’t abide by your rules and guidelines and if they abuse your website or mobile app. For instance, they may be requested to pay a fine, or they may be temporarily or permanently banned from using your services.

Terms and conditions

You should also make sure that your terms and conditions agreement includes a disclaimer notice that will limit your company’s liability. This means stating that you will not be held responsible if someone finds some kind of information on your website or mobile app to be incorrect.

Although this agreement is not required by law, it is highly recommended that you have it, precisely because of limiting your liability, as well as for protecting your company against any potential abuses of your website or mobile app, such as copyright infringement, for instance.

It is very important to protect your intellectual property, such as your logo, your unique web or mobile app design and your content (unless the content is user-generated), which is yet another reason for having a terms and conditions agreement.

Therefore, you should make sure that you include the Intellectual Property clause in your terms and conditions. Also, you should include the Governing Law clause to show that your terms and conditions are governed by the law of the country that you operate in.

Apart from limiting liability and protecting your business against any kind of abuse, this legal document also enables you to build credibility and trust with your users. You inform them of their rights and responsibilities towards your company, as well as yours towards them, which shows that you are a professional who is trustworthy.

Just like with your privacy policy, you need to let your users know about the potential modifications of your terms and conditions. If you plan on changing anything in your agreement, you need to inform them about the changes in advance and clearly state when they are going to take place.

Single agreement or separate agreements?

Some website and mobile app owners combine their privacy policy and terms and conditions into a single agreement. What they usually do is incorporate their privacy policy into their terms and conditions agreement by creating a separate section for it. This is not ideal because it is simply much easier for their users to take a look at both documents and, thus, fully understand what each of them entail. This is definitely a much smarter option, so you should always keep your terms and conditions and your privacy policy separate.

You can choose to reference your privacy policy document in your terms and conditions agreement, providing a link leading to the full document, and vice versa. That way, you inform your users that there is another legal document that they need to be aware of, in case they have perhaps overlooked it.

Keeping your legal agreements separate also lets your users know that each of the documents has a completely different purpose. It also helps them comprehend and retain all of the information easier, but you need to make sure that the agreements are clear, concise and written in plain language that your users will be able to understand, because not everyone will understand various legal and technical terms.

At this point, you certainly realize how crucial it is to have both terms and conditions and privacy policy agreements in place, as well as how essential it is to keep the two separated. These agreements will you help your website or mobile app users feel safe and secure when using your services, so you can easily form meaningful relationships with them and expand your customer base.

Moreover, you will effectively protect your business against any potential legal claims by your website visitors or mobile app users and make sure that it stays on the right road to success. Therefore, make sure that you properly and carefully draft these legal documents and that you make them clearly available and easily accessible by your users.