The Importance of Using the Correct Terms and Conditions For Your Online Business

The terms and conditions (T&Cs) define all the legal and technical terms in a contract between a seller and a buyer. Before you sell your products or services, the customer should first accept the T&Cs. Once they give their consent, you can allow them to make a purchase.

Once you have established a code of conduct, visitors will understand how to interact with your website.

In addition, your T&Cs can provide you with legal protection in case a dispute arises. Whilst only a few people may read your website’s T&Cs, it is still vitally important that you create them, especially if you run an e-commerce company.

What are the terms and conditions for e-commerce sites?

The T&Cs are the basis on which an online site can limit or exclude its liability. Companies can also use them to include any disclosure required by law, although certain things must be made extra obvious to your clients if they are consumers.   

Benefits of T&Cs for online businesses

1. Legal protection

Often, businesses don’t give much thought to their terms and conditions. Unfortunately, this leaves them open to potential legal action.

Once you have your T&Cs in place, you can expect to save on both time and money. This is your opportunity to set some pre-emptive groundwork. When you have a clear set of rules, you can avoid any possible disputes. It doesn’t matter what type of products or services you sell, it’s essential that you protect your business from any unexpected problems, including misuse or plagiarism of your site’s content.  

2. Building customer trust

T&Cs will allow your business to be transparent, which will in turn build trust among your customers. When it comes to online purchases, you need to earn people’s trust. Without it, your business will have difficulty generating sales. Fortunately, having transparent T&Cs will convince your customers to choose you over the competition.  

Things to include in the T&Cs

Now you understand the importance of T&Cs for your e-commerce site, you should consider what type of content you need to include in your contract. Whilst every business has its own requirements, there are certain specifications that are typical for every online store.

1. Terms of sale (TOS)

This section should clearly set out the conditions for the sale of your products or services. If there are any restrictions, you should clearly state this in the TOS. This includes:

  • Age-restricted sales
  • What will happen in the event of a product not being supplied

2. Terms of payment

This section covers the circumstances where a business is bound to face the biggest potential for liability. It is therefore imperative that your customers understand the mechanics of online transactions. If you are drafting your stores payment terms, be sure to include:

  • Payment methods – cash or credit card
  • Conditions for missing payments or late payments
  • Handling of product refunds or returns

How to treat payment disputes

3.Transport and delivery terms

This is another area where the potential for errors is significant. Deliveries could get:

  • Delayed
  • Damaged during transit
  • Cancelled

You need to establish clear guidelines, especially if a third party or freight courier is handling your deliveries. Whilst you have no control over the items once you hand them over to the delivery agent, the customer will still hold you accountable.

It is essential to take care of this side of the business, especially if delivery of your products is logistically challenging to fulfill. You need to outline and discuss:

  • The time required to fulfill an order
  • How costs are calculated
  • Extra fees if applicable
  • Level of responsibility your company has when third parties are involved

At the very least, your company should set out some provisions regarding order processing and delivery times.

4. Intellectual property rights

Online companies are always vulnerable to intellectual property theft; for example, of your logo, business name or site theme. One of the most effective ways of protecting your intellectual property is to clearly explain your ownership in your T&Cs.

By adding an intellectual property clause, you can ensure that none of your brand or trademarks can be misused. You can stipulate that visiting your online store does not give anybody a licence or right to use any brand or site content without your written consent.

For example, you can state that your content can only be used for personal and informational purposes.

5. Liability disclaimer

Sometimes, things will not go the way you planned; products could be lost or damaged, or even simply incorrect. Fortunately, you can specify the remedy for damages in your T&Cs. For example, your company may wish to provide customers with a replacement product in case of failure.

You could also specify that your online store should not be held responsible in the event of:

  • Loss
  • Liability
  • Damages
  • Any other expense that a customer may incur

Such a limit may cover losses of a direct, indirect or consequential nature.

6. Third-party links

If your online store contains external links, make sure to mention that these links are beyond your control and that customers use them at their own risk.

7. Promotional deals

Promotions and loyalty programmes can increase your bottom line. However, you need to ensure that your customers understand the provisions.

For example, if you are handing out free samples that then go out of stock, you may want to reserve the right to replace them with a different product, or no longer offer them. Another example is to state that your gift cards will not contribute to any minimum purchase requirements in relation to promotional codes.

8. Website terms of use

The terms of use set the conditions for accessing your online store and they apply to every visitor. They often cover issues such as privacy and the prohibited uses of your website.

For example, you can stipulate that your online store should not be used to abuse, defame, harass or violate the rights of others. You can also set a clause whereby you have the right to cancel a user’s access to your website if they breach your terms and conditions.   

Ways to create T&Cs

Drafting your own website’s T&Cs can be an onerous task. If you have no experience in this area of expertise then you should consider the following options.

1. Obtain legal help

This is your first option, think about hiring a contract consultant; specifically, a professional who specialises in drafting e-commerce terms and conditions. This will ensure that your contracts are explicitly suited to your online business. It can be far more cost-effective than you think if you choose the right one.

2. Use a T&Cs generator

The next possible option is to use software to generate your T&Cs. However, this type of tool may not provide terms that are specific to your exact requirements. You also don’t know where it has generated this from, when it was last updated and if it is even up to date and legal.

3. Use a template

The least desirable option is to use a template. Although this approach is not ideal, you can still use it to educate yourself on how to draft your basic terms and conditions. Also, you can use the template to add, remove or modify particular components of your contract.   Always be aware that these hold the same issues as a generator and more!

Create various T&Cs based on your customers’ locations

If your online business caters to the needs of customers residing in a wide variety of countries, it is unlikely that your T&Cs will cover every jurisdiction. So, in this scenario, you should consider adding a ‘Governing Law’ clause. For example, you can state that any dispute will be governed by the laws of your country or locale.

However, as your company expands, consider reviewing your T&Cs to ensure that they comply with the majority of laws in your target markets. 

The UK and Australia

In the UK and Australia, your T&Cs should have clear guidelines with regard to refunds and returns. This is a significant concern since a Shopify report revealed that almost 9 out of 10 online buyers have returned an item in the last three years.

In the UK, customers can cancel their online purchases for up to 14 days upon receipt of their goods. In addition, they can demand a full refund if the items are returned to the merchant within 14 days.

In Australia, the T&Cs must clearly state that they comply with the law. Also, the local regulators do not recognise a blanket ‘no refunds’ policy.

The EU

In the EU, the authorities do not like T&Cs that employ too much legal or technical jargon. Accordingly, the content should be written in such a format that the majority of customers will understand it. To find out more about creating T&Cs in clear and plain English, consider visiting this site. Your online business should also comply with the General Data Protection Regulation (GDPR).

The US

Your T&Cs are considered to be null and void if they violate US laws.

Other best practices to remember when creating practical T&Cs include:

  1. Make them easy to read
  2. Ensure they are regularly updated
  3. Obtain your customers’ consent


Creating terms and conditions can be a lengthy and costly exercise if you try to do it yourself. However, it is an essential process that should not be overlooked. Running an e-commerce website also has the potential to give rise to legal disputes, and some of these could prove costly. So, to avoid any complications,you should seek professional help to ensure that your T&Cs will perfectly suit your company, drafting T&Cs that will also help your business grow.

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