Terms and Conditions: Definition, Key Terms, Examples

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Terms and conditions are the vital details that businesses put in place to ensure that they protect their rights. However, you should also ensure that they are legal, enforceable, and serve their intended purpose. Otherwise, you leave your company exposed to legal liabilities or unwanted consequences.

Rather than leave your contracts to best guesses, check out the information below to learn more about terms and conditions.

What are Terms and Conditions?

Terms and conditions are part of a contract that ensure parties understand their contractual rights and obligations. Parties draft them into a legal contract, also called a legal agreement, in accordance with local, state, and federal contract laws. They set important boundaries that all contract principals must uphold.

Types of legal contracts that contain terms and conditions include:

Please note, the above list is not exhaustive and there are many more types of legal contracts that could be added.

Several contract types utilize terms and conditions. When there is a formal agreement to create with another individual or entity, consider how you would like to structure your deal and negotiate the terms and conditions with the other side before finalizing anything. This strategy will help foster a sense of importance and inclusion on all sides.

What’s Included in Terms and Conditions

Terms and conditions are very broad in the abstract sense. However, they contain more specific provisions depending upon the contract size, industry, and complexity. You will find that there are standard components included across several types of terms and conditions.

Terms and conditions may include:

Each one of these terms and conditions has a purpose. Some agreements require certain provisions, while others do not. The only way you can be sure about your terms and conditions requirements is by discussing your project with a contract lawyer.

Purpose of Terms and Conditions

The purpose of terms and conditions is to provide a set of instructions for all parties of a contract. They also offer guidance to courts regarding the intent and purpose of the transaction at the time it was created.

Elements of terms and conditions may include:

Terms and conditions exist to inform people of their rights when engaging in a business transaction. They carry legal implications of which both parties should be aware. Carefully review all contracts before signing them since many do not let you cancel them without penalty before fulfilling your obligations.

Terms and Conditions vs. Terms of Service

Terms and conditions and terms of service are different. Using them interchangeably will result in legal errors or miscommunications. Avoid this situation by reviewing their definitions separately.

Below, check out the differences between terms and conditions vs. terms of service.

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Terms and Conditions

Terms and conditions refer to the contractual rights and obligations of a party to any contract. They refer to the broader concept of guidelines that parties must follow in an agreement. Your business can create them for any formalized business agreement.

Terms of Service

In contrast, terms of service, also referred to as terms of use, are the eCommerce terms and conditions surrounding the use of a service or application and must comply with the General Data Protection Regulation (GDPR) guidelines. Software companies utilize them more often than other industries. Use terms of service when your company offers a business service, too.

Examples of Terms and Conditions

Terms and conditions are essential for any type of formal relationship. If you want to protect your legal rights, remember to always get it in writing. Otherwise, it’s your accusation against the other party in case a future dispute arises.

Examples of when to use terms and conditions include:

There are several reasons to include terms and conditions in a transaction. The rule of thumb is to incorporate them into your deal when providing a service or dealing with a sale in excess of $500. You should also utilize them when required by your industry or professional licensing organizations.

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Getting Help with Terms and Conditions

Your business must write airtight terms and conditions. An effective agreement mitigates the chances of a dispute and costly litigation. Ensure that an attorney drafts and negotiates your contract when getting help with terms and conditions.

These are a few other reasons that you will want to work with an attorney:

Reason 1. Understands Contracts

Poorly drafted contracts don’t perform as intended. Your attorney will review your situation to determine which provisions you should include in your agreement. They can also participate in negotiation discussions with the other party throughout the process if desired.

Reason 2. Guarantees Enforceability

If your terms and conditions are unenforceable, then they don’t serve your purpose. Your attorney has command of relevant contract laws to prevent this predicament from arising. It’s their job to guarantee that you walk away with an enforceable contract.

Reason 3. Knows Contract Law

Terms and conditions are subject to common contract laws. They must also comply with local, state, and federal laws. Whether you operate one or multiple locations, hire an experienced attorney to help you navigate this aspect of your agreements.

Reason 4. Prepared for a Dispute

It’s reassuring when someone understands your business’ legal history. Contract lawyers are also ready to handle a legal dispute if you face one down the road. They can help you renegotiate terms in case things change or fight them out in court.

Avoid Making Legal Mistakes

As you can see, the most proactive way to get legal help is by speak with contract attorneys. It is tempting to use boilerplate templates, but keep in mind that these agreements were created for another business at one point. Avoid inadvertent legal mistakes that can cost you your company by seeking advice from a licensed professional.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

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Nicholas V.

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Free Consultation 6 Yrs Experience Licensed in AL, CO, NY, TX Texas A&M University School of Law

I am a solo practitioner, and manager of the Law Office of Nicholas J. Vail, PLLC, with offices in Denver, Colorado and Austin, Texas with a focus on general business and real estate contracts.

Scott S.

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Scott S.

Free Consultation New York, NY 17 Yrs Experience Licensed in NY Benjamin Cardozo School of Law

Scott graduated from Cardozo Law School and also has an English degree from Penn. His practice focuses on business law and contracts, with an emphasis on commercial transactions and negotiations, document drafting and review, employment, business formation, e-commerce, technology, healthcare, privacy, data security and compliance. While he's worked with large, established companies, he particularly enjoys collaborating with startups. Prior to starting his own practice in 2011, Scott worked in-house for over 5 years with businesses large and small. He also handles real estate leases, website and app Terms of Service and privacy policies, and pre- and post-nup agreements.

Danny J.

Free Consultation Member Since:
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Danny J.

Free Consultation New York, NY 10 Yrs Experience Licensed in NY New York Law School

I have had my own law practice since 2014 and I enjoy solving my clients’ problems. That’s why I constantly stay on top of the latest developments in the law and business of startups, entertainment, art, intellectual property, and commercial enterprise. I constantly keep learning because everything I learn helps me make my client’s life better. I assist clients in all aspects of copyright, trademark, contract, trade secret, business, nonprofit, employment, mediation, art, fashion, and entertainment law. Even though I am licensed to practice law in NY, I have worked for clients all over the country and even in Europe, Africa, and Latin America. No matter the client, I always look for ways to protect their assets, artworks, businesses, and brands with strategies to help them grow. I am a fluent bilingual legal professional who can analyze complex legal and business problems and solve them creatively for the benefit of my clients. I am detail-oriented and attentive which makes me excellent at negotiating, drafting, and revising all types of agreements and deals. I advise creatives and companies on intellectual property issues, risk management, and strategic planning. My clients love what I do for them because I employ a practical, client-tailored, and results-oriented approach to their case, no matter how small.

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www.parachinilaw.com I represent a diverse mix in a vast array of specialties, including litigation, contracts, compliance, business and financial strategies, and emerging industries. Credit for this foundation of strength goes to those who taught me. Skilled professors and professionals fostered my powerful educational and professional background. Prior to law school, I earned dual Bachelor’s degrees in Business Administration & Accounting from Peru State College. I received a Master of Business Administration degree from Chadron State College. My ambitions did not stop there. While working full time as a Senior Accountant for the University of Missouri, Columbia, I achieved the lifelong goal of becoming a licensed Certified Public Accountant (CPA). Mizzo provided excellent opportunities and amazing experiences. Managing over $50M in government and private research funding was a gift. As a high ranking professional in the Department of Research, I was given priceless insight into the greatest scientific, journalistic, medical, and legal minds in the world. My passion for successful growth did not, and has not stopped. I graduated summa cum laude (top 3%) with a Doctorate in Law, emphasizing in urban, land use and environmental/toxic tort law from the University of Missouri, Kansas City. This success lead to invaluable experiences of serving as Hon. Brian C. Wimes' judicial clerk for the U.S. District Court for the W. D. of Missouri, as a staff editor/writer for UMKC Law Review, and as a litigation and transactional attorney with Lathrop GPM (fka Lathrop & Gage). My professional and personal network is expansive, with established relationships throughout the U.S. and overseas. Although I engage in legal practice all over the country, I maintain law licenses in Missouri, Kansas, and Nebraska. Federally, I hold licenses in the W.D. and E.D. of Missouri and the District of Nebraska. To offer extra value, efficiency, and options, I maintain a CPA license and am obtaining a real-estate brokerage license.

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Terms and Conditions

Asked on Jun 7, 2024

Can a company modify their Terms and Conditions without notifying their users?

I recently signed up for an online service and agreed to their Terms and Conditions, which included a clause stating that they can modify the terms at any time without prior notice. However, I have now discovered that the company has made significant changes to the Terms and Conditions, and I was not notified about these changes. I am concerned about the legality of this situation and whether the company can modify the terms without any form of notification to its users.

Muhammad Yar L.

Answered Jul 5, 2024

While the general practice is to at least provide users the notice for any material change. However, Companies often include such clauses to allow them to modify any terms without notice. The legality of such language depends on many factors: (a) the interpretation of such language in the terms, (b) the nature of the changes, and (c) the applicable laws governing such terms. However, many courts and regulators expect companies to provide reasonable notice of significant changes, even if the terms state otherwise.

Terms and Conditions

Asked on Nov 30, 2023

How often to review terms and conditions?

I am the founder of an e-commerce business and I am in the process of creating Terms and Conditions for our website. I want to ensure that our Terms and Conditions are up to date and legally sound. I am wondering how often I should review and update the Terms and Conditions to ensure that they are still valid and applicable to our business.

Darryl S.

Answered Jan 2, 2024

At lease once a year, you should revisit you Ts and Cs to address any changes to your business model or new laws that may apply to your business.

Terms and Conditions

Asked on Dec 3, 2023

Are terms and conditions needed for blogs?

I am the owner of a blog and I am currently in the process of setting it up. I am looking to understand if I need to have terms and conditions set up for my blog, as I have heard that this is a necessary step. I am interested to know if this is true and if so, what type of terms and conditions should I include?

Darryl S.

Answered Jan 2, 2024

Yes, even a website with only a blog should have Terms and Conditions to provide legal protection by limiting liability in the case where someone uses your content in a way that could cause damages to themselves or you. In addition, Ts and C's can clarifying content ownership, clearly define usage guidelines, and ensure compliance with laws. These terms may also specify which jurisdiction's laws govern the website, essential for sites with a global audience.

Terms and Conditions

Asked on Nov 29, 2023

Are terms and conditions legally binding?

I recently started a business and I am in the process of creating a website for it. As part of the website, I am creating a Terms and Conditions page. I want to make sure that the Terms and Conditions are legally binding so that if I ever need to take legal action against a customer, I am protected. I have read some articles about Terms and Conditions, but I would like to get a professional opinion on the matter.

J.R. S.

Answered Jan 5, 2024

Yes, terms and conditions on a business website can generally be enforceable against consumers. The enforceability of terms and conditions on a business website against consumers is not straightforward and depends on various factors, including the type of agreement used, the presentation of these terms, the consumer's acknowledgment of these terms, and the specific provisions within these terms. However, the enforceability primarily hinges on how these terms are presented and whether the consumers were given reasonable notice of these terms. There are three types of electronic form agreements typically used by websites to incorporate terms and conditions: "click-wrap", "browse-wrap", and "sign-in-wrap" agreements. "Click-wrap" agreements necessitate the user's express assent to the terms and conditions by clicking a button that reads "I Agree" or some other method of explicit agreement. In these cases, the consumer is presumed to be aware of the additional terms and conditions and consciously chooses to proceed with the transaction. "Browse-wrap" agreements include terms and conditions either posted on the website, a hyperlink, or are accessible on the screen, but do not require the user's express assent. The validity of these agreements depends on whether a website user has actual or constructive knowledge of a site's terms and conditions prior to using the site. "Sign-in-wrap" agreements involve notifying users of the existence of the website's terms and conditions and advising them that they are agreeing to the terms when registering an account or signing in. Courts usually enforce these agreements when the notice of the terms was "reasonably conspicuous." This can include situations where a hyperlink to the terms and conditions is present on nearly every webpage of the company's website, or when the webpage from which the user indicates their assent contains a conspicuous hyperlink to the agreement. However, there are exceptions to the enforceability of these terms and conditions and much depends on the type of business you are and the specific terms and conditions that you impose on consumers through your website.

Terms and Conditions

Asked on Dec 1, 2023

Are digital terms and conditions enforceable?

I am a small business owner who is in the process of launching a new website. I am looking to create a Terms and Conditions page for visitors to my website, but I am unsure if digital Terms and Conditions are legally enforceable. I am looking for advice on how to best create a Terms and Conditions page that is legally binding and enforceable.

Diane D.

Answered Dec 12, 2023

Yes, digital terms and conditions are legally enforceable. The best way to create them are to have a contract attorney draft them for you.