Creating your website terms and conditions

Your website is the online doorway to your business. The website's terms and conditions—also called “terms of use" or “terms of service"—lay down the ground rules for users visiting your website and serve as a binding agreement between you and the user, or website visitor. The website terms and conditions protects you from legal liability should a dispute arise. Below are some tips for creating your website terms and conditions.

Overview of terms and conditions

Terms and conditions are the rules that your website operates by. While they are not required by law, courts often look at a website's terms and conditions to determine what type of contractual arrangement exists between you and the user in the event a legal dispute arises. A well-drafted set of terms and conditions lets users know what is and is not permissible on your website.

Terms and conditions differ from a privacy policy, which states what information your site collects from users and how it is stored, used, and shared with third parties.

You must include a privacy policy on your website if you collect identifying information—such as names, addresses, telephone numbers, email addresses, credit card information—from users. It's a good idea to include both a privacy policy and terms and conditions on your website.

Basic elements of the terms and conditions document

The basic elements that terms and conditions include vary depending on the type of business your site is and how it operates. Ask yourself what types of goods and services you provide, how you interact with customers, what potential legal liabilities may arise and how you will handle them, how you plan to operate your website, and how customers can use your website. The answers can help you tailor the basic website terms and conditions to your specific business needs.

In general, the terms and conditions include such information as:

• The website owner's name

• A copyright and trademark notice

• A privacy statement, usually containing a link to the full privacy policy

• A limitation of liability disclaimer

• A permitted use statement

• An external links statement

• An intellectual property policy

• A statement of governing law

• A statement of use of third-party information

• Explanation of the website's use of cookies

• A statement of right to refuse service

• An acknowledgement statement, which affirms the user had read and agreed to the terms and conditions

Terms and conditions specific to e-commerce

If you operate an e-commerce website, you need to include rules of conduct between your website and your customers that apply when someone makes a purchase. This protects you and your business should, for example, a product purchased off your website fail.

For an added layer of protection, consider adding an “active agreement" to your website. An active agreement makes acceptance of the terms and conditions of the website a condition of sale either before a customer enters the site or at the point of purchase.

E-commerce website terms and conditions contain the same information as regular terms and conditions, with some additions:

• A data protection statement disclosing how the customer's personal information will be used, stored, and protected

• A disclaimer of liability specifying that you are not responsible for any damage, expense, liability, loss, or personal injury

• Payment terms setting out how and when payment is to be made

• Delivery terms covering both shipping and delivery, including any related costs

• Product information and warranties setting out how products can be purchased and by whom (in the case your site has age restrictions, for example) and what happens if the product is out of stock

• A statement spelling out your policy on refunds and returns

• A right-to-cancel statement defining under what circumstances the customer can cancel an order

Drafting terms and conditions

When you're writing terms and conditions for your website, keep them simple and easy to understand. While it might be tempting to “borrow" terms and agreements from another website or to use an online “terms and conditions generator," you want to create personal, customized terms and conditions that are appropriate to your situation to protect yourself and your business from potential claims. 

No one will ever probably read your website's terms and conditions, but you'll have them should the need arise.