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What are Terms and Conditions: The Definitive Guide

Whether you operate a website, a blog, an online store, or a mobile app, you should likely consider having terms and conditions to protect your business and establish a transparent relationship with your users.

Expert tip: Take the hassle of writing your own terms and conditions agreement away with our terms and conditions generator. It will save you hours of work and possible costly legal mistakes.

What are Terms and Conditions?

Terms and conditions act as a contract between you or your business and your users and customers. It serves to set out the rights and responsibilities of both parties.

In order to use your website, product, or mobile application, your users must agree to abide by your terms and conditions and to provide services as per the terms.

What are Terms of Service and Terms of Use?

You most likely have seen terms and conditions referred to by other names such as terms of service (ToS) and terms of use (ToU). These various terms may confuse some people and make them think they're completely different agreements.

In fact - there is no difference. Any of these three terms (sometimes even referred to as user agreement) can be used as the name of the agreement to indicate the same document.

Many major websites use these phrases interchangeably. It is the information contained within the page that is important.

Why do You Need to Have Terms and Conditions?

Who needs terms and conditions

While they are not legally required, terms and conditions set the stage for any successful business relationship, by making it clear and putting these guidelines in writing, business owners can avoid misunderstandings with their customers.

It also allows you to decide what you consider acceptable and which type of conduct could lead you to terminate a relationship with a user.

For example, if you have rules as to what type of user-generated content can be shared on your website and someone posts something that goes against these, then you would have a leg to stand out should you decide to take that content down.

It can also help you limit your liability in regards to some situations, which could reduce the likelihood of facing lawsuits or reduce the damages that you would have to pay should it be demonstrated that your user was aware and had agreed to your terms.

In other words, when drafted properly, it allows you to maintain ownership and control over your product (website or application) and can help in maintaining a positive and pleasant relationship with your users as they will be aware of what constitutes acceptable behavior.

Not only that, it can address a lot of the questions that users may have and for which they would have reached out to you for an answer, effectively saving you time and resources.

What to Include in Your Terms and Conditions?

Terms and conditions should always be drafted with the particularities of your business in mind.

The first step when thinking about drafting T&Cs should always be to identify the risks and liabilities associated with your business, website, or mobile application in order to better address them in your terms.

Here are some clauses which are considered standard in terms and conditions agreements.

General Conditions & Termination

It is your website or mobile application, therefore you can decide how it should be used.

It is common to see terms and conditions which include a list of prohibitions or general guidelines to be followed by users. These can be broad, such as stating that your services are not to be used for illegal or unlawful purposes or that users must not try to breach or test the vulnerability of your network or circumvent security measures.

If your platform is collaborative, meaning users are invited to share such as on a social media network, you could have a separate page with community guidelines, which you could link to in that clause.

You can reserve the right to terminate the contract or disable user accounts should there be a violation of any of your terms, guidelines, and conditions by including a termination clause - this is very common in the case of websites and SaaS applications.

After all, you want to be able to take action should someone misuse your product.

Copyright & Intellectual Property

Copyright clause

While having an intellectual property clause won’t guarantee that someone won’t copy your work, it can certainly act as a good deterrent.

Having a copyright notice that confirms and warns your users that the content on your website is yours and is not to be reproduced or re-used without your express permission and that re-affirms that you hold trademarks and ownership over certain elements of the website itself and over the products that you sell should be a no-brainer.

DMCA Takedown Process

It is common practice to include a clause that explains how you process and respond to DMCA takedown notices - you don’t have to go into detail but you could summarize the important information, include a link to your contact form or email address, and link to your separate DMCA policy.

Products & Services

If you sell products online, you may wish to state that while you do your best to ensure that descriptions are accurate and colors adequately represented, you cannot be held responsible should there be discrepancies in size, shape, or colors with the products received by the customer as their computers may simply have been showing them differently.

The same goes for product availability. You could state that while you aim to ensure that a product for sale is in stock, you won’t be held liable if there was a mistake and a product is sold out, in which case you reserve the right to cancel their order.

Similarly, you should recognize that errors do happen and you could, for example, give yourself the right to correct wrong information, such as prices, and to cancel or refuse to process an order that was made based on that information.

Your business may evolve along the way, therefore you may wish to include a sentence stating that you may add or remove features, products, or services from time to time without any prior notice.

Limitation of Liability & Disclaimers

Limitation of liability disclaimers is one of the main reasons why business owners take the time to include terms and conditions on their websites. When reasonable and drafted adequately, such clauses can help protect your business against claims and lawsuits and limit the amount of money that you would have to pay in damages.

While you cannot exclude your liability for just anything and everything, you could, for example, state that you will not be held liable should your users not be able to use your website or your product - this is important, especially if you offer a service or platform on which businesses rely on in order to operate.

It is common to see clauses that state that service or website is made available on an “as is” and “as available” basis which means that a user’s decision to use the service is taken at their own risk.

It's also a good idea to have a separate disclaimer available that explains this and other related clauses in-depth.

User-Generated Content

User submitted content

If you allow your users to share comments or photos on your website or leave reviews of the products that you sell, you will want to have a section in your T&Cs that govern their conduct and sets out what is acceptable and what isn’t.

In this clause, you could reserve the right to monitor the user-generated content shared on your website and remove anything that goes against your guidelines. You could expressly ask your users not to post anything that contains obscene language or any material that could be considered harmful or violent or infringes on someone else’s copyright.

You could also make it clear that you reserve the right to suspend or delete the accounts of repeat infringers. This will help you make your website a safe space where people can feel comfortable sharing their opinions, which is especially important if you operate a news site, blog, or forum.

From a business point of view, you could reserve the right to use the submitted content for marketing purposes which a lot of big box stores and eCommerce retailers do in order to promote products that get rave reviews. It’s important for your customers to know that you plan on doing so, otherwise they could be surprised to see their words or photo used in a commercial!

Payment & Subscription Information

Payment & Subscription Information

If you are selling products or services online, you may wish to specify the methods of payment that you accept, including your use of third-party payment providers if any (PayPal, Stripe, etc.), and your payment terms.

Similarly, if you operate based on a subscription method, you should set out when payment will be taken and at what frequency. Your customers should be able to refer to your terms to understand how they will be charged if they choose to cancel their subscription and when they will stop being able to access your platform, app or services i.e. will it be immediately upon cancellation or will they have access until the end of the month.

If you offer a free trial period, you need to be clear with your users as to what happens at the end of that timeframe. Will their credit card automatically be charged unless they cancel prior to the end date, and will it continue to be charged monthly unless they terminate their subscription? Will they still have access to what they have created during the trial period if they choose not to subscribe to your product or will their data be erased?

Writing this down in black and white can prevent bad surprises and, in the event that a customer is unhappy, you will be able to refer them to the terms and conditions that they accepted (provided of course that you diligently made sure that they were aware of them).

Shipping, Returns & Refunds

Shipping, Returns & Refunds

If you sell physical products through your eCommerce store, you should have a clause in your terms and conditions that addresses your shipping and returns policy, with a hyperlink to the separate page where it is hosted.

In a few sentences, summarize the important information contained in those policies, such as the destinations you ship to if your products are eligible for refunds or exchanges only, the timeframe in which a customer must begin the return process, etc.

If you sell digital products, such as eBooks, you should make it clear that your customers will not be receiving a physical product in the mail and that, instead, it is up to them to download the item that they have purchased using the link provided.

Links

Third party links

If you, from time to time, link to other websites, you may wish to include a clause that lets your users know that this does not imply that you are endorsing all content on the third-party’s website and that you are not responsible for whatever happens when your users choose to follow a link and leave your website - they should be considering the respective terms and privacy policies of these external websites.

Marketing

Affiliate links

If you are using affiliate links on your website or mobile application, you should include a clause that lets your users know that you may be receiving compensation if they use one of your links to make a purchase. Note that they should be reminded of that affiliate relationship in the near vicinity of the links, such as in the blog post that contains the affiliate links, for example.

Cookies

Similarly, terms and conditions usually have a cookie clause that summarizes how your website uses cookies and links to your privacy and cookie policies, hosted on separate pages.

Governing Law and Dispute Resolution

Governing law

The beauty of the Internet is that it is far-reaching and accessible to people located across the globe. On the other hand, this can create a world of issues when disputes arise and need to be settled in court.

For that reason, you may wish to elect a governing law and a dispute resolution process. If your business is located in the state of California, you may wish to specify that any dispute that arises out of these terms and conditions or use of the website will be governed by the laws of that State.

You may also wish to subject all disputes to arbitration instead of going in front of the courts, in which case your users need to know so that they can make an informed decision before they start using your website or your product.

Contact Information

Contact information

Any good policy should make it easy for users to contact the website or mobile application owner. Include your email and business address, as well as a contact form if you have one, and invite your users to contact you should they have any questions or concerns.

Updates & Notifications

Drafting terms and conditions is not a one-time thing. You will need to review these regularly to make sure that you keep up with any changes in your business or products offered as well as with applicable legislation.

Let your users know how they will be made aware of these changes. You could for example mention that you will update the date at the top of your T&Cs page in the case of minor changes but notify your users via email or a pop-up in your mobile app should there be any significant modifications.

If you want to spend more time on your business and less time drafting terms and conditions, use our terms and conditions generator. It will help you generate comprehensive T&Cs to protect your business, products, and services.

If you are operating an eCommerce store, we have an article that specifically addresses your challenges.

Can You Copy Terms and Conditions From Another Website?

You should never use someone else’s terms and conditions as every business is unique and thus should have its own set of rules.

While you may offer a similar product to that of your competitor, you may be operating your business very differently.

You can look to them for inspiration but always consider the particularities of your business before drafting your own T&Cs. What are the risks, liabilities, particularities of your products or services, who are you selling to? These are just a few of the elements that should be taken into account when drafting your terms.

Not to mention that copying someone else’s work could also be considered copyright infringement, which is definitely troubling that you want to avoid getting into.

Where to Display Your Terms and Conditions?

Terms and conditions should be hosted on a standalone page of your website to make the information digestible for your users. It should link to your privacy policy and cookie policy to ensure that your website visitors know that these exist and apply, as well as to any other policies or guidelines that you have.

As a general rule, terms and conditions are made accessible through a hyperlink displayed in the website footer. This is good practice as it makes it easily accessible to website visitors and visible before they start navigating your website.

Example of terms and conditions in the footer

However, if you want to make sure that your visitors have read and accepted your terms and conditions, you should consider using a click-wrap agreement. This will allow you to retain the proof of acceptance, which could come in handy should you need to enforce those terms or should there be a dispute in the future.

How? You could have customers tick a checkbox or click an “I agree” button confirming that they acknowledge and agree to your terms during the account creation process or by using a pop-up that appears when they first land on your website.

Example of terms and conditions checkbox

If you operate an online store, you could confirm their acceptance of your terms and conditions and privacy policy during the checkout process.

It is good practice these days to request affirmative consent from your users, so avoid using any pre-ticked boxes.

Terms and Conditions Examples & Template

We have put together an article that contains examples of terms and conditions used on some major websites and drafted a terms and conditions template that you can modify to make your own, click here to read it.

Final Words

The advantages of having terms and conditions are evident. They are what governs the relationship between you, as the business owner, and your users or customers.

While you cannot plan for every type of situation nor prevent any and all misunderstandings, having your users take notice of and agree to your terms and conditions before they use your product or services could go a long way, especially if you do end up in front of the courts.

For that reason, drafting your terms and conditions should not be taken lightly. Whether you retain the services of a lawyer or use a generator, make sure that your terms are clear, easy to read, clearly binding, conspicuously placed, and brought to the attention of potential users in a timely manner so as to retain evidence of their acceptance.

Don’t waste time writing legal documents yourself and avoid costly mistakes others make. Create a dependable attorney-drafted terms and conditions agreement custom-tailored specifically to your needs in just a few minutes with our online generator.