A Terms and Conditions agreement (T&C) sets out the rules, policies, and requirements of your website or mobile app for its users. Many companies opt for generic or standard Terms and Conditions agreements, but it's important to remember that your T&C agreement forms a legally binding contract between you and your customers.
Specific terms, duties, rights and responsibilities in Terms and Conditions agreements vary widely depending on business type. This article explains what a Terms and Conditions agreement should include, with 18 common Terms and Conditions clauses your digital business needs to stay legal and effective.
Here are the clauses a T&C should include.
Your Terms and Conditions agreement should start with your company information. This is the legal identity of your business and where it operates from. Basic company information allows customers to reach you and verify who you are. Company information in a Terms and Conditions agreement should include:
A service description clearly explains what your business is offering to its customers. This section of the T&C needs to be carefully customized for your business to set customer expectations and prevent misunderstandings.
Your business needs boundaries around service delivery. Set clear limits with a service description that helps reduce customer service issues, prevent disputes, and limit unwarranted claims.
Detail exactly what customers get, including features, any limitations, and the delivery methods your business will use. A service description typically includes:
User Eligibility also helps to set appropriate limits on how your online or offline products and services are used. This section defines who can legally use your service or platform. If someone accesses your services in violation of your stated user eligibility terms, you have clear grounds to withdraw your services.
Depending on your jurisdiction, a user eligibility section specifies details like user age, location, or any accreditations or certifications necessary to access what you sell. Typical user requirements include:
User accounts are a key feature of many digital businesses. The account rules section of your agreement specifies how these accounts should be managed. Here, you can provide key guidance for account creation, maintenance, and termination. Businesses can ensure they comply with key data protection and cybersecurity requirements by detailing account user requirements. This section also needs to outline the circumstances leading to account suspension or termination, such as violations of terms, extended inactivity, or security concerns.
Payment terms clarify how and when payments are made when users purchase your products and services. This section is critical to developing a viable business model as you can state key financial obligations, forecast working capital, and avoid being vulnerable to late or disputed payments. Your payment terms should cover crucial details such as:
Use the Acceptable Use Policy section of your Ts&Cs to define the proper use of your products and services. Be clear about the permitted user activity. By specifying prohibited actions and usage limits you can protect your enterprise from service misuse, and set out actionable consequences and the grounds for account termination. An AUP should include:
A robust and comprehensive Intellectual Property Rights section is vital for protecting your intellectual property and creative works from unauthorized reproduction. It also ensures you receive proper recognition and credit.
In the digital realm, this means clearly distinguishing between user-generated and platform-generated content on a platform. At a minimum, your IPR clause should include:
User Content Rules provide key guidance for user-generated content on a platform. Use this T&C section to build a framework that defines acceptable standards for content sharing and protects both the service platform and its users. User content rules should be clear about the type and nature of offensive, illegal, or harmful content to ensure the platform maintains appropriate community standards. Key points to address in this section include:
A Privacy Policy details how your organization handles user data. It is typically a stand-alone document, linked as part of a Terms and Conditions agreement.
Detail and transparency on the storage, use, protection, and disposal of user data protects your reputation and establishes user trust. At a minimum, your Privacy Policy should comply with relevant legislation and data protection regulations like GDPR. Users need to be clear that they retain control of their personal information. Key components of a Privacy Policy include:
The liability limitation clause reduces legal exposure by clearly defining your organization's responsibilities and establishing any necessary damage limits.
Be transparent about service performance and any potential and unexpected challenges to service delivery, your business may encounter. By being clear about the scope and limits of your business operation, you can set realistic expectations and minimize your liability. The liability limitations clause should include details like:
Dispute resolution saves businesses time and money by requiring conflicts to be solved through arbitration instead of court. A dispute resolution clause helps your business manage conflict by providing an up-front explanation of how disagreements between you and your customers will be handled. Adding the following points to your Terms and Conditions Agreement ensures that you set a clear pathway for conflict resolution without a court battle:
Termination Rights explain how to end a service relationship and the next steps for you and the customer.
Prevent disputes with users by being clear about how a transactional relationship ends and the rights and responsibilities involved. Outline the specific terms for ending service provision with a clear explanation of:
By including Changes to Terms as part of your Terms and Conditions agreement, you reserve the right to modify your business' relationship with its users. However, any changes to terms must be clearly communicated to users with reasonable advance notice. This section of the agreement explains when and how users will be notified of any changes to terms and any consent required for major changes to how your enterprise operates. At a minimum ensure that the Changes to Terms section includes:
Use the Governing Law section of your agreement to state which country's laws govern your business operation. This clause outlines which courts will handle disagreements, providing legal certainty over how disputes will be settled if a business operates internationally. You can also clarify if medication is part of the legal framework used by your organization. A Governing Law clause typically includes:
If you operate a website or digital service, ensure that it clearly states that your platform or application may contain links to external content or services not operated or controlled by your company. This can be done using a Third-Party Links clause advising users they click on external links at their own risk. You can also use this section to limit liability by advising users that the presence of third-party links does not imply that your business endorses or recommends the third-party.
Indemnification is a key protective clause which explicitly requires a service user to protect your business from any claims, damages, losses, liabilities, costs, and expenses that may arise from their misuse of your service or violation of its terms. This section explains to a user the actions that trigger indemnification. It also clarifies the scope of protection required, and states your company's right to assume defense of any claims at the user's expense. This clause should address:
A Severability Clause makes it clear if any provision of your Terms and Conditions agreement is found invalid, illegal, or unenforceable, the remaining provisions will be unaffected. This is an important safeguard that preserves the integrity of your agreement. You can also use this clause to specify that invalid clauses or sub-clauses should be modified rather than being completely removed. Make sure that your severability clause covers:
Lastly, your Terms and Conditions agreement should also address Assignment Rights. This useful clause explains if and how you and your customers can transfer their contractual rights and responsibilities to others. Companies usually reserve the right to pass on their part of the deal. In the event of a merger or sale, this clause becomes essential. For subscription services, businesses are usually keen to restrict users from transferring their rights without permission. Your assignment rights section needs to state:
Drafting a Terms and Conditions Agreement can be daunting. Here's how to write a terms and conditions agreement for a website or mobile app:
Write a list of the products and services you offer. Pinpoint key features and user benefits that
should be addressed and clearly outlined in your T&C agreement. By defining your value proposition and its scope, you're better positioned to set suitable legal limits for your users.
Look for areas in your online business model that could expose your company to litigation. Address technical problems that could impact your ability to uphold your service description, and develop strategies for handling complaints promptly.
List clauses that are relevant to your business, then arrange them in a logical order. Your language should be clear and concise. Keep sentences short and simple, using examples where necessary to illustrate key points to the user.
Also consider user experience, creating a digital document that is searchable, printable, and mobile friendly.
Notify your users when T&C agreement is implemented and update them on any subsequent changes. Schedule regular reviews once you publish your agreement to ensure that your T&Cs remain effective.
A Terms and Conditions agreement protects your online business. Use it to inform users of the rules for using your service and to stay legally compliant. By including the clauses shared in this article, you can create a document covering every aspect of your business' operation.