Last updated on 21 May 2022 by Jocelyn Mackie (Former civil litigation attorney. Content legal strategist at TermsFeed)
It's difficult for a new business owner to spend time on a T&C when when there's product development, marketing and other tasks to complete, but rest assured, the time spent on a T&C is worth it. Once complete, you will have an agreement capable of protecting your interests and your bottom line.
This article will get you started with creating your own custom Terms and Conditions agreement for your small business. We've also put together a Small Business Terms and Conditions Template that you can use to help write your own.
Our Terms and Conditions Generator makes it easy to create a Terms and Conditions agreement for your business. Just follow these steps:
Enter the email address where you'd like the T&C delivered and click "Generate."
You'll be able to instantly access and download the Terms & Conditions agreement.
Unlike the T&C often attached to a website or app, the T&C between a small business and its customers is much more personal. It is the contract that sets out rules for the relationship. While it may contain general guidelines applicable to all customers, it may present details more specific to a particular customer - like prices and deadlines.
You make a written Terms and Conditions agreement available to your customers for two main reasons:
The area where a T&C is most vital is with payment policies. Terms indicate important details such as when a customer pays, how much, any late payment penalties, and collection costs if the matter escalates.
It is an unfortunate reality that when it comes to bill paying, smaller businesses end up at the bottom of the pile. You can strengthen your position with the right payment terms in your T&C.
This can include prepayment deposits, monthly subscription costs, and even interest on late payments. Without these items being addressed in a T&C, you cannot enforce these terms and may end up working hard or providing products without a guarantee of payment.
Misunderstanding is possible in all contractual relationships. Imagine the disaster if you expect to receive payment for materials before building a product but the customer believes payment is not due until delivery. If you do not have the prepayment terms in writing, it makes it difficult to enforce terms to your best interest.
The same is true with service or product quality, deadlines for completion or delivery, and returns and refunds. If a client can review these terms before purchasing your product or service, everyone enters the transaction informed. This prevents the misunderstandings that can lead to dispute resolution procedures later.
Check out our Terms and Conditions FAQ for more information about these important agreements.
Here are the essential provisions you want to include and how to make them available to your customers.
Not all of the following provisions may be relevant to your business, but they are a good place to start when considering what you need for your T&C. Examples here include a sample from a freelancing website and one of the few small business T&C agreements available online.
Every T&C between a small business and its customers must include a description of the products and services. It can also include services that are not provided with a contract.
Planet Fitness defines its services as everything from its website and mobile application to services of subsidiaries and affiliates:
Generally, the smaller your business, the more specific you want to make your service or product descriptions. Besides giving the customer a good idea of what you will provide you also avoid being taken advantage of by a customer demanding additional services or products with the fees they paid. Avoiding this scenario is also beneficial to your bottom line.
Your payment terms should include prices, terms of payment, interest or fees on late payments, returned check charges, and the cost of shipping, handling, freight, and returns.
Here's how Planet Fitness lays out information about its billing and fees structures:
A warranty or guarantee on your work offers reassurance, even if it is broad. If you are able to be specific on what is considered quality, note that in your T&C.
Warranties and guarantees should also contain time limits. You do not want a refund request five years after providing a product or service. Choose a timeline reasonable for your industry, like 30 days or even 12 months.
Here's how Steris breaks down the timeframe for its warranty, as well as what isn't covered by it:
Most of these clauses, similarly to the next one we'll cover, have general language, usually in all capital letters, that cover the topic generally. These are good statements to include for addressing liability issues.
Your Terms agreement is where you can limit your liability and avoid potential legal claims against you for a variety of things. Including a fairly standard clause addressing this is a great addition to any Terms agreement.
Here's how Steris does this:
It is also possible to limit liability and offer a guarantee. If a product fails, it is only reasonable to provide a replacement or refund. However, if you do not properly advise of risks or take reasonable precautions to keep people from getting hurt, it is unlikely a liability limitation will work in your favor. So, make the effort to have policies to back it up.
Retail establishments normally maintain separate Return and Refund Policies. Ecommerce sites usually give this policy its own webpage.
If you sell products online, you can place these policies in your T&C as well. This will typically be done in a fairly short summary clause or statement that then links to the entire Return and Refund Policy. However, if your return policy is short enough (such as "no returns or refunds"), you can include the complete information within your Terms and Conditions agreement without linking to a separate policy.
Best practices dictate to keep these policies separated:
Here's an example from Planet Fitness of a Terms and Conditions clause that encompasses the entire return and refund policy - there isn't one:
Here's an example of a more robust clause that addresses refunds and links to a separate Refund Policy, from Basecamp's Terms of Service:
You can use the TermsFeed Return and Refund Policy Generator to create your own policy.
Timelines will depend on the nature of your product. Services have deadlines and goods have expected dates of delivery.
This clause can be very basic, or very complex depending on the nature of your delivery processes.
Here's an example of a very thorough clause from Knauf Insulation:
If your customer insists on a deadline, be careful that you agree on one that you will actually meet. Never choose an unreasonable deadline or delivery time that is impossible to meet with your resources.
This clause will help you protect the branding aspects of your small business that make you unique. For example, your brand logo, pictures of your products, and any other creative material you share.
Here's how ServiceNow notes that its website content, copyrights, patents trademarks and other intellectual property belong to the business:
These clauses tend to be fairly standard and just need to communicate that your IP and copyrighted material is yours and that others cannot use it freely.
Termination clauses describe how the relationship outlined in the T&C may end. It generally states this occurs by mutual agreement or if one party gives notice of termination.
Some companies have exact procedures in place for how a termination will occur.
Here's how ServiceNow notes that it may terminate the Terms agreement at any time via written notice:
Putting a statement in your T&C about governing law is a good idea if your product or service is not limited by location. For example, if you sell a product that you ship across the country or even overseas. It is likely you want disputes settled close to home. The only way to guarantee this is to limit the jurisdiction where customers can bring complaints.
Here's how ServiceNow addresses this information in a Governing Law and Jurisdiction clause:
Now that you have an idea of what clauses to include in your Terms and Conditions agreement, let's look at how to display the agreement to your small business customers.
Where you provide access to your T&C depends on whether your business is online, mainly offline or a combination of both.
If you run a bricks and mortar business with a website existing for exposure, but customers cannot purchase products or services through it, you do not need to include your T&C online. You can provide it when clients or customers visit or keep it posted conspicuously at your store or office.
First, you should always include a link to your agreement within your website's footer. This is a place where people know to look for important legal agreements and links. And, it will be available from every page of your website for ultimate accessibility.
Here's an example of this from Enchanting Marketing:
If you give the option to schedule services or order products through your website, present the T&C as part of that process.
Here's how H and M does this:
Consider adding a checkbox and an "I Agree" statement along with the link to your Terms so you can get users to clearly agree to them.
This is known as clickwrap and it is a popular way of assuring acceptance of agreements with web sites and apps. It works well for these purposes too if you allow people to purchase your product or service online.
Here's an example from H. Samuel:
When you draft a Terms and Conditions agreement for your small business, you need the correct provisions but also the right mindset. This agreement exists to preserve your business under the worst developments. You need to draft it to offer that protection.
You can do that by following these tips:
A good Terms and Conditions agreement is the best time investment you can make for your small business. Give this task time and serious consideration so you secure the best legal protection possible.
This free Sample Small Business Terms and Conditions Template is available for download and includes these sections:
You can download the Sample Small Business Terms and Conditions Template as HTML code below. Copy it from the box field below (right-click > Select All and then Copy-paste) and then paste it on your website pages.
More specific T&Cs Templates are available over our blog.
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