Businesses define sets of terms and conditions to describe the contract between themselves and their customers. These documents set out business procedures, protect companies’ and consumers’ rights, and limit companies’ liabilities. Although terms and conditions often contain large amounts of legal jargon, most of them have generally the same provisions. Read on to find out about eight areas every set of terms and conditions should cover.
1. Acceptance of the Agreement
To be valid, a set of terms and conditions must be accepted by a customer, client, or user. Most websites allow users to esign terms and conditions to acknowledge that they have read and accepted them. Others just include a provision that states that a customer’s use of the service constitutes acceptance of the company’s terms and services. That’s usually fine, too.
2. Privacy Practices
Business owners should mention privacy explicitly in their terms and conditions even if they have separately drawn-up privacy practices. This reassures customers or clients and protects the company from liability by providing transparency about data use and storage. It’s also fine to just mention user privacy and include a link to the privacy practices.
3. Limitation of Liability
The terms and conditions should make it clear that the company doesn’t accept responsibility for any damages incurred from the use of its services. Without a general limitation of liability, users can sue for damages for viruses, app failures, shutdowns, and other seemingly insignificant issues. Make sure there is no room for misinterpretation.
4. Intellectual Property Rights
Companies that don’t own much in the way of intellectual property can just include a standard statement. Those who are concerned about trademarks and copyrights may want to include a more detailed statement that includes specific restrictions.
5. Advertising and Endorsements
Any company with a website that hosts advertisements from third-parties should disclose that explicitly in its terms and services agreement. Companies should also waive liabilities connected to the ads. Websites or apps that don’t contain third-party advertisements don’t need this provision.
6. Payment Terms
All subscription services should include payment terms in their agreements. This allows businesses to terminate services if customers don’t pay. Since companies typically have separate pages that inform customers of subscription plans and associated costs, there’s no need to include information about payment amounts in this section. In fact, mentioning payment amounts obligates businesses to change their terms and conditions when they adjust their prices, so it’s best to avoid it.
7. Termination Clauses
Termination clauses allow companies to terminate users’ accounts if they violate the terms and conditions. General termination clauses are usually fine, although some companies also include specific information about what behaviors will not be tolerated.
8. Notifications of Changes
All companies and organizations wind up changing their terms and conditions as they encounter new issues or learn more about their markets. Including a statement that the document may be changed at the company’s discretion and that users will be notified is sufficient.
The Bottom Line
A company’s terms and conditions set forth rules for using the service, define the company and the clients’ responsibilities, and limit the company’s liability. No website or app should be without this essential document. For most business owners, using a template is the easiest and most affordable way to ensure they haven’t missed anything important, especially if they take the time to alter the template as needed to include more specific provisions.
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