June 27, 2019

The different types of terms and conditions for your business

Updated 30 March 2022

You are likely most familiar with website terms and conditions, but there are others types of terms as well.  

Here’s what  you need to know about the different types of terms and ways you can use them in your business. 

All-in-one terms

All-in-one terms sound appealing but they are not ideal. 

I am referring to terms that cover website use, affiliate and reseller terms, refund policies and everything else in between in one go.

Confusion and the time and complexity of searching for the answer are the two key reasons. 

Worse, these terms  may cause overwhelm for your customers and your customers may give up on reading them. 

While it may not be practical to have separate terms and conditions for each aspect of your business, you may wish to try grouping, I will explain this idea next. 

Terms

Before we get into the different types of terms and conditions, you’ll hear some terms that all mean the same thing. These are: terms of use, terms of service, terms and conditions and website terms. 

Titles aside, what matters most is the content of your terms. 

If you are unsure, check in with your lawyer before they start drafting them for you. At this point you should be talking to your lawyer about particular concerns you want to cover for. 

So what should you be aiming for?

Your goal

Aim for terms that cover key aspects of your business operations, are clear and limit your liability wherever legally possible.

You can always build on your terms as your business expands or pivots. This mindset helps clients not to get stuck reworking comprehensive terms that don't cover current operations. 

Grouping terms

Grouping your terms is a balanced approach. 

I suggest grouping your terms and conditions wherever possible for each set of your business activities. 

Below are some examples of how you can group your terms and conditions.  

Website

The website terms and conditions are perhaps the most commonly known by clients. They cover: 

  • Product delivery 
  • Payment terms including refunds 
  • Pricing errors 
  • Disclaimers of liability 
  • Indemnity 
  • Viruses 
  • Hacking incidents

Do you have many offerings sold on different terms? In this case, you may want terms for each offering.

Terms for each offering

As you develop more offerings that have different features, delivery, payment and refund rules, you may wish to have separate terms and conditions for each.

An example would be if you supply your products online and in a bricks-and-mortar store.

In this case, you may want to give your online shoppers more generous return time frames compared to your bricks-and-mortar customers, to give them peace of mind.

Promotions

You can have terms and conditions for each promotion that you run.

Below are sample items you may cover in your terms: 

  • Whether the offer is available with another 
  • How long the promotion will run 
  • Locations where the promotion is available 
  • Quantity limitation - e.g. one person per coupon, one person per day etc. 
  • Use limitation - e.g. coupon is only for person x, y or z

New or complex offerings

If you need to explain a new or a complex business process in many words, a new policy is going to be useful. 

Terms and conditions vs client agreement

Also, while you can have terms and conditions, in some situations you may also need a client agreement. 

For example, where  you are delivering bespoke services to a client that you are not delivering to all your clients, in this case, a client agreement is appropriate. Here are some examples: 

  • Loyalty discounts
  • Free product offer for a loyal customer 
  • Additional work to customise a product or service for a customer. 

I’ve written about the choice between terms and conditions and client agreements here.

Bringing it all together

Bringing it all together, here's what you need to know:

  • Terms are also known as terms and conditions, terms of service, terms of use and simply terms.
  • Break up your terms and conditions into categories for each aspect of your business
  • Example terms include website, promotions and product offerings.
  • Check if you also need a client agreement. 
  • Make sure your terms are clear and protect you from liability as far as legally possible. 

Always get advice if you are unsure. I wish you success in  all your ventures! 

Questions? Comments? Leave them below.





About the author 

Vivian Michael

As founder and lawyer at Michael Law Group, Vivian advises Australia's top entrepreneurs on business and employment matters. Clients benefit from Vivian's commercially focussed and pragmatic legal advice, business experience, and commitment to deliver the best quality business legal services to her clients.

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