If you have a website that you take seriously, particularly a business website, you might have asked yourself whether you need terms and conditions. All the big sites have them, after all. What do they know that you don’t? The answer is simple: they know that doing business on the web is the same as doing business anywhere else, in that it involves financial risk.  Any venture that involves dealings with the public involves the risk of legal and financial liability. That liability can be prevented and mitigated in many ways, including by agreement. And that’s exactly what website terms and conditions are: they’re an agreement—a contract—between the website owner and each website user.

Who needs terms and conditions?

Anyone who runs an ecommerce website, sells goods online, provides a service, or offers a software application of any kind, either in exchange for money or for free, should ideally have some kind of terms and conditions. Whether you call them terms and conditions, terms of use, terms of service, or something different, what they are is a document that creates a legally binding agreement between you and  your users. This document will protect your interests and limit your liability in the event of a problem or conflict with a customer or user.

You might be wondering how such a document can be a contract without users actually agreeing to it. The answer is: they do. Agreement doesn’t have to be in the form of a signed document. If you read well drafted terms, you’ll see they explain when and how a user agrees to them. Many websites have you check a box stating that you agree to their terms and conditions while creating a user account; others simple state that you agree to the terms and conditions by the simple act of using the website, service, etc.

What can terms and conditions do for me?

A lot of things, including:

  • describe and limit the exact service your website provides
  • state how, when, and why you can cancel a user’s account
  • set out what rights the user has (e.g., a revocable license to use your service)
  • limit and disclaim liability
  • indemnification
  • control how disputes are handled (e.g., by arbitration rather than litigation)
  • set out policies for community areas of the site
  • set out privacy policies
  • set out other, industry-specific policies that apply to your users
  • govern payment terms and refunds
  • control each party’s obligations regarding notice and communication
  • provide intellectual property policies, guidelines, and procedures (e.g., infringement and DMCA takedown procedures)

and much more. The best terms and conditions are modular, living documents that are updated regularly and reconsidered periodically, based on how users actually use the website or app.

Creating a good terms and conditions document (usually with an accompanying privacy policy) is also a prerequisite for being approved to use important monetization services like Google AdWords and other advertising platforms. If you’re developing an app for sale on a marketplace like the Apple App Store or Android, you’ll need decent terms and conditions before your app will be approved.

OK, you convinced me. Where do I get some?

Ideally, you should get them from a lawyer. There are certainly other resources, like terms and conditions generators and boilerplate templates that you can find online, but if you want to maximize your chances of protecting yourself and your business from potentially devastating legal liability, then you should contact an attorney or law firm experienced in drafting online terms and conditions documents.  For a few hundred dollars, you can avoid thousands in legal fees later on. And if you’re thinking about just copying another sites: don’t. Not only would be potentially infringing someone else’s copyright, terms and conditions aren’t one-size-fits-all. Your business might be subtly or totally different from the other website’s. Your terms and conditions should be custom tailored for your business, service, or app, so that all legal possibilities and potential liabilities are considered and addressed.