Terms of use and terms and conditions are two distinct contractual agreements between your website users and your business . Be careful not to get them mixed up because they often apply at different times and also have different implications. 

This article will clear up the difference and hopefully give you some guidance for your own business.

What Are Terms Of Use?

Think of terms of use as an agreement between every person visiting your website and your business. Your website’s visitors have responsibilities but they also have protections too. They are essentially the terms under which every visitor agrees to engage with your business and your website. 

If they don’t like the terms or don’t agree, they don’t have to accept it – as with any other contract.

Almost every website you visit will have a  ‘terms of use’ section. Your website should be no different. You should have a terms of use section which is clearly visible and easy to comprehend for the average every-day person. 

You should know that a terms of use agreement applies to all visitors of your website, and not just customers who pay for your goods or services. It’s especially important that you get it right.

What Is Included In Terms Of Use? 

Terms of use should include what the website will do with the visitors’ data, which has been generated by visiting the site and whether it will be shared or used for any purpose. Other sections of note may be a notice on cookies, general disclaimers, international compliance (i.e. to follow the laws of certain jurisdictions) and license to use.

A major component of a terms of use agreement will be defining what is use or misuse of a product or service you provide. This is critical as you, the business owner, should determine what standards should be upheld when a person is using your website or engaging with your business. The inverse is just as true. However, visitors deserve to know how they’ll be protected.

All of the above ‘terms’ have to be legally compliant. You should also think of how you can best protect your website’s visitors but at the same time safeguard the interests and limit the liabilities of your company. What this means will vary depending on your website’s functions, set up, and purpose. 

What Are Terms And Conditions?

Terms and conditions are the conditions upon which a website visitor engages your business and the products or services you offer. It is a contractual agreement between a paying customer and you, the business. Generally, it comes into effect once an economic exchange is made, and is a precursor/requirement to said exchange happening. 

If you are running an online business, your website may have a page with terms and conditions that shows up just before a purchase is processed. It’s likely that you’ve ticked a ton of these run-of-the-mill boxes to confirm you ‘understand’ the terms and conditions. But all downplaying aside, it is vital the customer understands this, and it is even more important that you have your own.

Think of it as a way to set out the expectations and responsibilities of both parties to the exchange, but with the aim of protecting you from liability if something were to go wrong. And by wrong, it means the customer was to act outside the scope of the terms and conditions laid out. With well drafted terms and conditions, your revenue stream and other key legal rights will be protected.

What’s Included In Website Terms & Conditions? 

Your terms and conditions agreement may include intellectual property reservations, payment particulars, liability, termination and details of dispute resolution if needed. These are all aimed at protecting you should anything go wrong.

It will heavily be moulded by the type of business you run. For example, your terms and conditions may set out the visitors obligations with respect to the economic exchange taking place. Say you are running a retail business, and a customer is looking to purchase a piece of clothing. They may be obligated to return the item within a set amount of days in order to receive a refund (note, this isn’t law, this is just a hypothetical). Similarly, this clause would limit your liability in the sense that you wouldn’t need to be providing refunds from 10 years ago.

If you need further guidance on terms and conditions, it might be worth checking out our How to Write Terms and Conditions for Your Website article. Note this is just guidance, and your website’s terms and conditions will vary depending on what industry you’re in, the function of the website and the type of transaction that is being entered into.

What Is The Difference Between Terms Of Use And Terms & Conditions? 

Both terms of use and terms and conditions are legally enforceable agreements which involve your business and the visitor of your website. They both will vary depending on your website and the type of business you operate. 

The difference lies in when they apply. A terms of use agreement applies when a person visits your website, and applies to all visitors or users. A terms and conditions agreement applies when an economic exchange takes place. Therefore, your website shouldn’t prompt someone  to accept a terms and conditions agreement just because they visited your website. It is a trade off for exchanging your goods/services for the consumers’ consideration.

Another major difference is which party is protected by either agreement. A terms of use agreement protects the person  visiting your website by describing where things such as their data and user account account information will be stored and used. It is a type of reassurance given by your business to the customer. Conversely, a terms and conditions agreement protects you, the business, by limiting your liability when people exchange with you.

Another minor difference is that terms of use agreements are generally more standardised because it incorporates less of the business (and therefore less variable) than a terms and conditions agreement. A terms and conditions agreement incorporates the business by operating as terms and conditions for purchasing a product for example. This could include clauses such as a refund or shipping policy.

Takeaway Message

Terms of use protect persons  visiting your website. Terms and conditions protect you, the business, when you engage with customers  in an economic exchange. Protect your consumers and website’s visitors, but also protect your own liability. Every website is different, so avoid looking up a ‘standard’ template.

Need Help?

If your business needs further direction with establishing clear and comprehensive terms of use and/or terms and conditions that limit your liability, Sprintlaw has your back. We can help you draft  Terms of Use Business and Terms and Conditions for your business’ website.

Feel free to contact our friendly team who will help you get things underway. We can be reached at 1800 730 617 or alternatively at team@sprintlaw.com.au for a free, no-obligation chat.

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