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Terms and conditions are the vital details that businesses put in place to ensure that they protect their rights. However, you should also ensure that they are legal, enforceable, and serve their intended purpose. Otherwise, you leave your company exposed to legal liabilities or unwanted consequences.
Rather than leave your contracts to best guesses, check out the information below to learn more about terms and conditions.
What are Terms and Conditions?
Terms and conditions are part of a contract that ensure parties understand their contractual rights and obligations. Parties draft them into a legal contract, also called a legal agreement, in accordance with local, state, and federal contract laws. They set important boundaries that all contract principals must uphold.
Types of legal contracts that contain terms and conditions include:
- Real estate contracts
- End-user license agreement (EULAs)
- Software as a Service (SaaS) agreements
- Construction contracts
- Insurance contracts
- Employment contracts
- Financial contracts
- Information technology contracts
- Freelance contracts
- Healthcare contracts
- Service contracts
- Business contracts
- Entertainment contracts
Please note, the above list is not exhaustive and there are many more types of legal contracts that could be added.
Several contract types utilize terms and conditions. When there is a formal agreement to create with another individual or entity, consider how you would like to structure your deal and negotiate the terms and conditions with the other side before finalizing anything. This strategy will help foster a sense of importance and inclusion on all sides.
What’s Included in Terms and Conditions
Terms and conditions are very broad in the abstract sense. However, they contain more specific provisions depending upon the contract size, industry, and complexity. You will find that there are standard components included across several types of terms and conditions.
Terms and conditions may include:
- Intellectual property rights
- Termination clauses
- Governing law clause
- DMCA notice clause
- Limitation of liability
- Enforceability clause
- Arbitration clause
- Confidentiality clause
- Indemnification clause
- Severability clause
- Definitions clause
Each one of these terms and conditions has a purpose. Some agreements require certain provisions, while others do not. The only way you can be sure about your terms and conditions requirements is by discussing your project with a contract lawyer.
Purpose of Terms and Conditions
The purpose of terms and conditions is to provide a set of instructions for all parties of a contract. They also offer guidance to courts regarding the intent and purpose of the transaction at the time it was created.
Elements of terms and conditions may include:
- Rights
- Obligations
- Duties
- Roles
- Responsibilities
- Consideration
- Handling disputes
- Important dates
- Deliverables
- Payment terms
- Limitations
Terms and conditions exist to inform people of their rights when engaging in a business transaction. They carry legal implications of which both parties should be aware. Carefully review all contracts before signing them since many do not let you cancel them without penalty before fulfilling your obligations.
Terms and Conditions vs. Terms of Service
Terms and conditions and terms of service are different. Using them interchangeably will result in legal errors or miscommunications. Avoid this situation by reviewing their definitions separately.
Below, check out the differences between terms and conditions vs. terms of service.
Terms and Conditions
Terms and conditions refer to the contractual rights and obligations of a party to any contract. They refer to the broader concept of guidelines that parties must follow in an agreement. Your business can create them for any formalized business agreement.
Terms of Service
In contrast, terms of service, also referred to as terms of use, are the eCommerce terms and conditions surrounding the use of a service or application and must comply with the General Data Protection Regulation (GDPR) guidelines. Software companies utilize them more often than other industries. Use terms of service when your company offers a business service, too.
Examples of Terms and Conditions
Terms and conditions are essential for any type of formal relationship. If you want to protect your legal rights, remember to always get it in writing. Otherwise, it’s your accusation against the other party in case a future dispute arises.
Examples of when to use terms and conditions include:
- Engaging in business with others
- Working for a company as an employee
- Selling products to consumers online
- Organizing a sweepstakes or lottery for participation
- Selling policies an insurance provider
- Offering services as a real estate professional
- Providing services as a construction contractor
- Building websites for customers
- Drafting a prenuptial agreement for high net worth couples
- Lending money or offering services to bank customers
- Hiring a freelancer through a job talent marketplace
- Taking people out on adventure excursions commercially
- Renting out hotel rooms to consumers
- Including a warranty with a consumer product
There are several reasons to include terms and conditions in a transaction. The rule of thumb is to incorporate them into your deal when providing a service or dealing with a sale in excess of $500. You should also utilize them when required by your industry or professional licensing organizations.
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Getting Help with Terms and Conditions
Your business must write airtight terms and conditions. An effective agreement mitigates the chances of a dispute and costly litigation. Ensure that an attorney drafts and negotiates your contract when getting help with terms and conditions.
These are a few other reasons that you will want to work with an attorney:
Reason 1. Understands Contracts
Poorly drafted contracts don’t perform as intended. Your attorney will review your situation to determine which provisions you should include in your agreement. They can also participate in negotiation discussions with the other party throughout the process if desired.
Reason 2. Guarantees Enforceability
If your terms and conditions are unenforceable, then they don’t serve your purpose. Your attorney has command of relevant contract laws to prevent this predicament from arising. It’s their job to guarantee that you walk away with an enforceable contract.
Reason 3. Knows Contract Law
Terms and conditions are subject to common contract laws. They must also comply with local, state, and federal laws. Whether you operate one or multiple locations, hire an experienced attorney to help you navigate this aspect of your agreements.
Reason 4. Prepared for a Dispute
It’s reassuring when someone understands your business’ legal history. Contract lawyers are also ready to handle a legal dispute if you face one down the road. They can help you renegotiate terms in case things change or fight them out in court.
Avoid Making Legal Mistakes
As you can see, the most proactive way to get legal help is by speak with contract attorneys. It is tempting to use boilerplate templates, but keep in mind that these agreements were created for another business at one point. Avoid inadvertent legal mistakes that can cost you your company by seeking advice from a licensed professional.
Meet some of our Terms and Conditions Lawyers
Morgan S.
Corporate Attorney that represents startups, businesses, investors, VC/PE doing business throughout the country. Representing in a range of matters from formation to regulatory compliance to financings to exit. Have a practice that represents both domestic and foreign startups, businesses, and entrepreneurs. Along with VC, Private Equity, and investors.
Terence B.
Terry Brennan is an experienced corporate, intellectual property and emerging company transactions attorney who has been a partner at two national Wall Street law firms and a trusted corporate counsel. He focuses on providing practical, cost-efficient and creative legal advice to entrepreneurs, established enterprises and investors for business, corporate finance, intellectual property and technology transactions. As a partner at prominent law firms, Terry's work centered around financing, mergers and acquisitions, joint ventures, securities transactions, outsourcing and structuring of business entities to protect, license, finance and commercialize technology, manufacturing, digital media, intellectual property, entertainment and financial assets. As the General Counsel of IBAX Healthcare Systems, Terry was responsible for all legal and related business matters including health information systems licensing agreements, merger and acquisitions, product development and regulatory issues, contract administration, and litigation. Terry is a graduate of the Georgetown University Law Center, where he was an Editor of the law review. He is active in a number of economic development, entrepreneurial accelerators, veterans and civic organizations in Florida and New York.
Jeff C.
Experienced and broad based corporate/business attorney and Outside General Counsel (OGC), for start-ups, small businesses and growing companies of all sizes, advising and assisting clients with corporate and LLC formation, contracts and agreements, internet and terms of use/service agreements, trademarks and intellectual property protection, the purchase and sale of businesses (M&A), labor and employment matters, compliance and risk management, corporate governance, and commercial leasing matters. See other reviews on my website at www.ogcservices.net/reviews
Steven S.
Steven Stark has more than 35 years of experience in business and commercial law representing start-ups as well as large and small companies spanning a wide variety of industries. Steven has provided winning strategies, valuable advice, and highly effective counsel on legal issues in the areas of Business Entity Formation and Organization, Drafting Key Business Contracts, Trademark and Copyright Registration, Independent Contractor Relationships, and Website Compliance, including Terms and Privacy Policies. Steven has also served as General Counsel for companies providing software development, financial services, digital marketing, and eCommerce platforms. Steven’s tactical business and client focused approach to drafting contracts, polices and corporate documents results in favorable outcomes at a fraction of the typical legal cost to his clients. Steven received his Juris Doctor degree at New York Law School and his Bachelor of Business Administration degree at Hofstra University.
Rhea d.
Rhea de Aenlle is a business-savvy attorney with extensive experience in Privacy & Data Security (CIPP/US, CIPP/E), GDPR, CCPA, HIPAA, FERPA, Intellectual Property, and Commercial Contracts. She has over 25 years of legal experience as an in-house counsel, AM Law 100 firm associate, and a solo practice attorney. Rhea works with start-up and midsize technology companies.
April 1, 2023
Conner H.
Patent attorney with master's in electrical engineering and biglaw experience.
April 9, 2023
Benjamin S.
Benjamin Snipes (JD/MBA/LLM) has 20 years of experience advising clients and drafting contracts in business and commercial matters.
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Browse Lawyers NowContracts
Terms and Conditions
Florida
Are digital terms and conditions enforceable?
I am a small business owner who is in the process of launching a new website. I am looking to create a Terms and Conditions page for visitors to my website, but I am unsure if digital Terms and Conditions are legally enforceable. I am looking for advice on how to best create a Terms and Conditions page that is legally binding and enforceable.
Diane D.
Yes, digital terms and conditions are legally enforceable. The best way to create them are to have a contract attorney draft them for you.
Business Contracts
Terms and Conditions
Washington
Are oral terms and conditions enforceable?
I am a small business owner who is in the process of creating a new website. I am writing my own terms and conditions for the website, and I want to ensure that they are legally enforceable. I understand that written terms and conditions are legally enforceable, but I am unsure if oral terms and conditions are enforceable in the same way. Therefore, I am seeking your advice on the matter.
Merry A.
Whether or not oral (verbal) terms and conditions are enforceable may depend in part on how well the written contract makes it 110% clear that no changes can be made unless they're in writing and signed by all parties in advance. Absent that kind of language in the written agreement, or absent any type of written contract, verbal agreements can be enforced - it's more difficult, of course, than if something is in writing.
Business
Terms and Conditions
Texas
Are terms and conditions legally binding?
I recently started a business and I am in the process of creating a website for it. As part of the website, I am creating a Terms and Conditions page. I want to make sure that the Terms and Conditions are legally binding so that if I ever need to take legal action against a customer, I am protected. I have read some articles about Terms and Conditions, but I would like to get a professional opinion on the matter.
J.R. S.
Yes, terms and conditions on a business website can generally be enforceable against consumers. The enforceability of terms and conditions on a business website against consumers is not straightforward and depends on various factors, including the type of agreement used, the presentation of these terms, the consumer's acknowledgment of these terms, and the specific provisions within these terms. However, the enforceability primarily hinges on how these terms are presented and whether the consumers were given reasonable notice of these terms. There are three types of electronic form agreements typically used by websites to incorporate terms and conditions: "click-wrap", "browse-wrap", and "sign-in-wrap" agreements. "Click-wrap" agreements necessitate the user's express assent to the terms and conditions by clicking a button that reads "I Agree" or some other method of explicit agreement. In these cases, the consumer is presumed to be aware of the additional terms and conditions and consciously chooses to proceed with the transaction. "Browse-wrap" agreements include terms and conditions either posted on the website, a hyperlink, or are accessible on the screen, but do not require the user's express assent. The validity of these agreements depends on whether a website user has actual or constructive knowledge of a site's terms and conditions prior to using the site. "Sign-in-wrap" agreements involve notifying users of the existence of the website's terms and conditions and advising them that they are agreeing to the terms when registering an account or signing in. Courts usually enforce these agreements when the notice of the terms was "reasonably conspicuous." This can include situations where a hyperlink to the terms and conditions is present on nearly every webpage of the company's website, or when the webpage from which the user indicates their assent contains a conspicuous hyperlink to the agreement. However, there are exceptions to the enforceability of these terms and conditions and much depends on the type of business you are and the specific terms and conditions that you impose on consumers through your website.
Web Design
Terms and Conditions
Texas
How often to review terms and conditions?
I am the founder of an e-commerce business and I am in the process of creating Terms and Conditions for our website. I want to ensure that our Terms and Conditions are up to date and legally sound. I am wondering how often I should review and update the Terms and Conditions to ensure that they are still valid and applicable to our business.
Darryl S.
At lease once a year, you should revisit you Ts and Cs to address any changes to your business model or new laws that may apply to your business.
Contracts
Terms and Conditions
Florida
Are there terms and conditions templates?
I am starting a business and I need to create a set of terms and conditions for my customers. I have been researching online, but I am overwhelmed with the amount of information available and I am not sure what the best approach is. I am hoping to find a template to help guide me in the right direction.
Diane D.
Yes. However, a template is a general, non-specific document. Specifying it to your needs can be tricky. You should have a lawyer do it for you because they are trained to limit any liabilities and risks your company may have. It's better to spend the money upfront, then try to get out of a mess letter, which will be much more expensive, especially if you get sued.
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ContractsCounsel User
Travel Terms and Conditions of Sale
Location: Texas
Turnaround: A week
Service: Drafting
Doc Type: Terms and Conditions
Number of Bids: 4
Bid Range: $750 - $1,975
ContractsCounsel User
Terms of Use for Centralized Digital Asset Trading Marketplace
Location: New Jersey
Turnaround: A week
Service: Drafting
Doc Type: Terms and Conditions
Number of Bids: 4
Bid Range: $1,250 - $3,500
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