Why businesses need Terms of Use

Why is that so essential for businesses and what do Terms & Conditions cover – read below

Terms of Use

Why businesses need Terms of Use. Source:

While most consumers skip the fine print altogether, the option to confirm that they agree with the Terms & Conditions is often treated as another bureaucratic formality redundant in this fast-paced world. Nevertheless, apps and websites keep forcing visitors to accept their Terms of Use before they proceed.

Why is that so essential for businesses and what do Terms & Conditions cover – read below.

What are Terms of Use

“Terms of use” is a common name for the legal agreement between a service provider and customers wishing to access the given services. Other titles of the same document that you may come across include Terms of Service, Terms and Conditions, etc.

This agreement clearly specifies the duties, obligations, rights, and expectations for both sides i.e. the client and the company. Otherwise, if there are no written rules, everyone would treat the contract according to their own understanding. For entrepreneurs, Terms of Use serve as legal protection against unjustified disputes and claims, or the unauthorized use of their proprietary content.

Businesses should not neglect well-crafted Terms & Conditions for a number of reasons:

  • they clearly define which products and services will be provided and which won’t
  • they set out payment and delivery terms, as well as conditions of product and money return
  • they serve as a disclaimer and specify limited liability terms
  • they may protect intellectual property
  • they can define rules for communication at the corporate website, defining inappropriate conduct or content
  • they specify what’s going to happen when the agreement is broken

What to include in the Terms of Use

Terms & Conditions differ depending on the business purposes, the nature of the services provided, corporate policies, etc. However, some items are universal for most agreements. Some standard points include:

  • Introduction – where you specify the sides of the agreement, clarify the meaning of the main notions, explain what’s the subject of the agreement is, which services are provided, what the agreement applies to, and so on;
  • The right to make changes – businesses should clearly define which conditions allow both sides to withhold their part of the agreement, in which situations payments/delivery or other aspects of provided services may change;
  • User guidelines – specify how the app or website users should interact with other platform customers, what actions are not tolerated, how users are supposed to acquire the service/content, etc;
  • Copyright – this part of the agreement states which visual or audio content is your intellectual property, whether it can be copied/downloaded/used on other online resources, protects trademark names, initiatives, and projects;
  • Warranty disclaimer – a statement that informs a buyer that the seller is not bound by any warranty guarantees or promises regarding the product;
  • Limitation of liability – protects your company from potential lawsuits by explaining what cases and circumstances your business is not responsible for;
  • Termination of accounts or services – this clause can be used to warn users what actions will lead to the termination of their accounts and when they’ll lose access to the provided services. For instance, those website visitors who don’t follow the user guidelines and abuse other people with hate speech, spam, etc can be banned. This paragraph can also inform users of what will happen to their data, money, created content, etc when their accounts are terminated;
  • Governing law – this article should explain why you are requesting certain sensitive information, ID documents, payment details, etc (since you can do it only with respect to some national legislation). It is very important for those having an international user base to make sure your customers are familiar with laws regulating your activities since they may radically differ from those functioning in their native countries;
  • Contacts – give the contact details for your business;

The sellers of physical goods should also include the following information:

  • Payment terms – explain how and when customers must pay for the product;
  • Shipping – specify acceptable delivery terms, your logistic partners, and include a limitation of liability for any unexpected circumstances that may hinder timely shipping;
  • Return and refund policies – clarify how and when customers can return faulty goods and get their money back, define which items can’t be returned, which conditions of returned items are acceptable and which are not.

Some resources provide free Terms of Use templates for their partners and clients. For instance, Shopify offers to customize terms of service for merchants’ websites. Other agreement generators can be found online and will ask you a few simple questions about your business so that your Terms of Use is more specific.


Although many national legislations don’t make Terms of Use obligatory, and International standards don’t technically regulate these agreements, their presence at your website/app interface is an additional safety net.

Terms & Conditions should be easily found and accessible. Moreover, if you wish them to be legally binding, users must confirm they have been properly informed about the agreement conditions. To do that, you should add a check box with the link to the Terms of Use. A check box can be substituted by the click button “I agree”, “Confirm” or something similar.

Most companies include it in the registration process. However, if you deal with online sales, you may allow people to browse the web-store freely, agreeing to follow your rules only at the checkout stage.


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