Terms and Conditions… those boring blocks of legalese hidden on websites, sometimes pages long, that cover such exciting topics as definitions, payment terms, user guidelines, content ownership, warranty, disclaimers, severability, indemnification, etc.
No one ever reads the Terms and Conditions, right? So the question is:
Do Terms and Conditions Actually Matter?
Spoiler: Yes, they matter.
First, a story.
The dating website PlentyOfFish.com offered to buy another dating website, True.com, for $700,000. The sale started to go through until the Texas Attorney General filed an objection. Why? Because True.com’s Terms and Conditions promised its users it would never sell, share, or rent their personal information. Whoops. Unfortunately for them, PlentyOfFish.com withdrew their offer, and True.com wasn’t able to sell its best asset – its database of 43 million.
Online shoe retailer Zappos had a Terms and Conditions snafu, too. Its Terms and Conditions included a common clause that said they could update the T&C at any time, and that by using the site, the user automatically agrees to any updates. Long story short, their Terms and Conditions were thrown out in court due to the unconscionability (legal term for really really unfair) of the clause. This easily cost them millions of dollars.
No matter how big or small you are, yes, your Terms and Conditions do matter.
While not required by law (yet), it would be foolish not to have Terms and Conditions for your online business. Make them favorable to you but also avoid the big mistakes like above.
What Your Terms & Conditions Should Include
What you want is a set of Terms and Conditions that outline the entire deal in a clear, detailed manner. Well-written terms address what would happen in every applicable situation.
The exact Terms and Conditions will depend on the type of business you’re operating. But every business should address some form of the following:
- A clear and concise definition of what products or services the business will provide;
- A detailed description of payment terms and accepted forms of payment;
- A timeline for payment, and also product delivery or service completion;
- Severability: A well-defined structure for dealing with a termination of a transaction. In other words, what happens when one party fails to deliver or pay, depending on the party;
- A disclaimer of liability;
- A list of warranties or guarantees the business wishes to offer;
- A statement of trademark ownership;
- And, a choice jurisdictional venue or forum, in the event of conflict.
Again, the specific terms and conditions depend on the type of business. For example, a retail clothing website will want to include instructions and deadlines for returning clothes. A dog walking business will want to address how far in advance a customer is free to cancel a scheduled walk and the penalty for canceling too close to the appointment time.
Go Write Your Terms & Conditions Now
As a businessperson, you want the law to be your friend. That happens when you’re proactive and take all the steps you can to CYA. The more protection your business has, the more likely your business is to find success! Having a thorough, custom set of Terms and Conditions is just one way to help protect your business. Or, buy them from Drafted Legal.
Action Steps on How to Write Your Own Terms & Conditions
First, here’s how *not* to write the T&C for your site: Do not just copy and paste another website’s T&C to your own. Like all contracts, T&C should be specific to you and your users. If you take the verbiage from another website, at best it may not be applicable to your situation, and at worst it could be harmful to your business (and it’s technically copyright infringement unless you were give permission).
- Buy your Templates from Drafted Legal
- Review the Terms. If you buy from Drafted, we’ll teach you how to do this. Ensure the Terms match your actual business practices. Think through the process from the time a users gets on your website through the purchase of your product or service through what happens afterward. Ask yourself what could go wrong at each point, and how you can address that in advance to protect yourself. Then think through the same process from the user’s point of view. What protections are they expecting in the transaction, and what must they know before making a purchase?
- Finalize and post your Terms and Conditions to your website.
- Sign up for Drafted’s newsletter. This is an ever-changing area of law, so you will need to know when the laws change. For example, the European Union recently passed extensive legislation. It’s only a matter of time until the United States does as well.