Terms of Use
A Terms and Conditions agreement is extremely important for your business to have for a number of reasons, including helping you limit your legal liability and keeping your users informed of your rules.
This article will guide you through creating a Terms and Conditions agreement for your business by covering what these agreements are, what their benefits are, how to create your own and then how to display and get agreement to it.
What are Terms and Conditions Agreements?
Essentially, a Terms and Conditions agreement is a contract between your business and the user of your website or app – whether they are an individual or a business. You may see Terms and Conditions agreements referred to as Terms of Service (ToS) or Terms of Use (ToU). There’s no practical difference between these terms and companies use them interchangeably.
Having a Terms and Conditions agreement is not a legal requirement, but having one is important as they protect your business and create a set of rules that anyone using your app or website must agree to.
Without a Terms and Conditions agreement your business and customers are lacking clearly defined rights, responsibilities and duties. This could lead to costly disagreements. For example, businesses lacking a payment clause in their Terms and Conditions agreements may receive late payments which affects the business’s cash flow and leads to money and time spent on debt collectors.
In addition, whilst not required by law, Terms and Conditions are a good place to include any disclosures that are required by law.
Benefits of Having a Terms and Conditions Agreement
There are a number of benefits that a Terms and Conditions agreement provides. Here are a few of the most important ones:
• Protecting your business – Terms and Conditions are crucial to protecting your business as they create a binding agreement between you and your customers, the terms of which can be legally enforced in court.
• Setting rules and expectations – Terms and Conditions create certainty and clarity by allowing your business to set user rules and expectations. Customers and business partners should know what to expect and understand what their rights and responsibilities are. This in turn makes them less likely to go back on their word and creates a mutual understanding between you and your end users.
• Defining acceptable use of your website or app – Your Terms and Conditions informs everyone who uses your website or app what conduct is acceptable and what isn’t. For example, if your website enables visitors to leave comments, your T&C can specify that these must not be abusive in nature. It can also give you the right to ban users that are in breach of these terms.
• Creating clear payment terms – Your Terms and Conditions advises users when payment is required, what methods of payment are acceptable and what happens if they fail to pay or pay late.
• Protecting your intellectual property – It’s likely that your business has some intellectual property or trademarks to protect. Your Terms and Conditions can contain clauses that ensure the user understands what is subject to copyright and what this means.
• Limiting your businesses liability – Your Terms and Conditions can limit your company’s liability and state that your business is not responsible for errors and omissions on your website or in other content you release.
