The difference between a client agreement and terms and conditions and when you should use each at your startup

By Vivian Michael | Startup Contracts

The difference between a client agreement and terms and conditions and when you should use each at your startup

What you need to know about client agreements and terms and conditions 

Terms and conditions and client agreements both have an important place in your startup.  

Knowing when to use each can help you can set clear expectations for your customers when they work with you.

So, terms and conditions - what are they?

Your terms and conditions are the rules that your prospective or actual customers have to abide by to either use your products or even access your website. Really, you can have terms and conditions that deal with any aspect of your business. 

We're dealing with the most common type in this article - website and product terms and conditions.

Sometimes terms and conditions are called terms of use,  and they can also be abbreviated as T&C or ToU.

So why do you need terms and conditions?

To avoid any legal trouble, it's important to make sure that people know what to expect before they do business with you.

What usually goes into terms and conditions?

Here are some of the items that are usually covered in terms and conditions:

  • parties covered by the terms and conditions e.g. your entity, website visitors and customers;
  • the products covered by the terms and conditions; 
  • purchase and return processes;
  • order tracking & delivery;
  • liability limitations e.g. security breaches, service outages; and
  • suspension or termination - acceptable use policies. 

Where should I display the terms and conditions?

You can display terms and conditions anywhere.

Popular places to display terms and conditions include your website, app, software and as attachments to invoices (soft and hard copies). 

A golden tip - always display your terms and conditions so your customers can see them before they make a purchase. 

Display your terms and conditions so that customers can see them before they make a purchase.

Why prepare a client agreement?

A client agreement can be customised for a customer's needs. 

You can customise pricing, delivery terms and other aspects of your offering. 

If you are concerned about setting up a bespoke client agreement for each client, in some instances, your lawyer can set up your contract so that key terms can be changed in a schedule only. Your schedule could look like this: 

Client Agreement Schedule

Client Agreement Schedule

So in summary of when you should use each resource:

When to use each

Use terms and conditions when your rules won't vary between your customers. For example,  if you were selling low value goods online and the same rules apply to everyone purchasing.

You can use a client agreement for more complicated product sales,  where terms are likely to vary between your customers. For example, instances where you may offer different conditions for a purchase or a volume discount to various purchasers.

Which one?

Should you choose terms and conditions OR a client agreement only?

Not necessarily.

If your product is straight forward and available to all your customers on the same terms, you probably won’t need a client agreement, and terms and conditions will be enough. For example, t-shirts or beauty products sold online.

If your product is more complicated, you may opt for terms and conditions and a client agreement. For example, professional services such as consultancy.

If in doubt, get advice.

Do you need help from an Australian business lawyer for startups? Contact us today for help on info@michaellawgroup.com.au or 1300 478 278 Australia wide or on +61 2 9151 7233 from overseas. We are always glad to help.





About the Author

Vivian Michael is a lawyer and founder of Michael Law Group. Vivian's mission is to make quality business legal services accessible to startups that would otherwise DIY, rely on legacy contracts or go without.

  • Oliver says:

    Great article, Vivian!

    I’ve seen it a lot in my line of work that T’s & C’s get copy/pasted by a competitor.

    Only recently I’m seeing that these are being more closely inspected by not only customers but Facebook and other service/subscription providers that are essential for startups.

    While the cost of terms and conditions to be drawn up by a lawyer tends to be looked at as a bit of a waste of startup capital. As a digital marketer working with startup businesses through our Business Startup Package (https://3amideas.com.au/services/business-startup/) I can only recommend getting T’s & C’s done up by a professional lawyer and staying away from plagiarism.

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