B2C vs B2B Sales: How Your Purchase Terms Should Change Depending on the Buyer

Getting your purchase terms right is important, as mistakes can cost you money, lead to litigation, or disrupt your business operations.

Selling to customers or to other businesses has a big impact on what your terms should be, particularly in relation to legal duties, warranties, cancellations, and other clauses.

Appropriate terms also depend on the jurisdiction you are in, because terms that may be commonplace in one jurisdiction can be unenforceable in another. In many jurisdictions, consumer protection laws exist that dictate what you can include in your B2C purchase contract.

This article will cover the differences between B2C and B2B, key differences in purchase terms between B2C and B2B, and how jurisdiction affects these terms.

Let's begin.

What is a Purchase Terms and Conditions agreement?

A Purchase Terms and Conditions agreement (sometimes called "Purchase Terms," "Terms of Sale," or "Purchase Agreement Terms") is a legal document that governs the relationship between a buyer and a seller in a commercial transaction. It lays out the rules, rights, and obligations for both parties when goods or services are purchased.

Think of it as the fine print that applies every time a purchase is made, whether attached to a purchase order, included in an invoice, or published online (e.g., for e-commerce).

What are the Differences Between B2C and B2B?

Business-to-customer (B2C) and business-to-business (B2B) are two different types of sales models, with correspondingly different purchase terms.

Consumers usually have more rights and legal protections such as warranty guarantees, rights of return, and cancellation rights.

Businesses, on the other hand, are generally seen to be capable of negotiating terms, and are not afforded the same protections. Courts and enforcement actions are generally taken more commonly in the B2C area, while B2B contracts may be looked at more from a perspective of standard contractual principles.

This has an impact on your purchase terms, and it's important that you are aware of the differences between contracts for the two groups. Let's take a look at what some of the key differences are.

Difference in Clauses Variation in B2B vs B2C Purchase Terms and Conditions Agreement

For purchase terms between B2C and B2B contracts, there are a few terms that can vary widely and may be more or less enforceable. These include clauses such as:

• Warranties
• Cancellations and returns
• Limitations of liability
• Dispute resolution

In short, differences in clauses between B2B and B2C can be:

Let's take a look at each of those with some example clauses now.

Warranties Clauses

Warranties are promises that the seller makes to the buyer, about the quality or performance of the product.

In B2C contracts, consumers are usually entitled to particular warranties, such as that the actual product must align with its description, or that it has to be fit for purpose.

Here's one example of a warranty clause from a Purchase Orders Terms and Conditions from Apple, where Apple is the purchaser and is buying from another business.

You can see that warranties are included in the contract, not given by the seller but required by the buyer (Apple). The agreement sets out that goods have to be free from defects, conform to specifications, and any warranties given by the seller's agents will be pursued as valid.

In another B2C example, a warranty clause from Signify sets out that there is a standard limited warranty that accompanies the product.

You can also see that for products that do not have the standard warranty, Signify provides a warranty that the products will be free of defects for 1 year.

For B2B contracts on the other hand, warranties can be negotiated or even removed or disclaimed, depending on the parties to the agreement.

In this clause, from the General Terms and Conditions of Sale for Corporate Customers, a German company MOESCHTER Group, there is no warranty included, and the obligation for checking the quality of the goods is passed on to the buyer. The buyer is required to check for completeness, conformity, and defects.

As you can see, if no complaint about the goods is raised within two weeks, the delivery of the goods is assumed to have been performed according to the contract. This means that if the recipient does not check for defects or complain about them, no warranty or guarantee of quality will be upheld.

This shows why your purchase terms have to reflect whether you are selling to a consumer or a business. In B2B contracts you might be able to disclaim or limit warranties, while in B2C contracts statutory guarantees will apply no matter what your contract says.

The difference between B2B contracts and B2C contracts is often like this: limited or no warranties for B2B contracts, with B2C contracts including standard and legislation-backed warranties.

Legislation on warranties and other sections will be covered below.

Cancellation and Returns

Cancellation and return clauses are those that cover the circumstances in which a buyer is entitled to cancel a contract or get a return on a product.

In B2C contracts, consumers can often take advantage of a "cooling off" period during which they can return a product. This is particularly the case for online purchases.

In the EU, this cooling off period (14 days) also applies to digital goods. However, if the customer has started downloading or using the digital goods within the cooling off period, the right to return the digital goods may no longer apply. In the US, such rules are not available for digital goods.

Here's an example from a B2C contract from Zalando, in which you can see a statutory right to cancellation set out. This means that the customer can cancel the contract within 14 days of receiving the goods. No reason has to be given.

All that is required to carry out the cancellation is that the seller needs to be informed, and the goods need to be returned. Zalando also offers an additional voluntary right of return.

For B2B contracts, termination or cancellation clauses are usually negotiated, and don't often include an automatic cooling off period. There are no specific rules for B2B contracts for digital goods, and they are dealt with in the same way as other purchases in a B2B context.

Here's a "Cancellation" clause from LTT Versand for a B2B contract. You can see that there is no right of cancellation for purchase contracts in this case.

The clause also sets out that goods can be taken back from purchase contracts if there is a cancellation. As shown by these clauses, there are quite significant differences between simple cancellation rights for B2C contracts, and no cancellation right at all for a B2B contract in this example.

If your buyer is a consumer, your purchase terms have to include statutory cancellation rights and practical processes for returns. If your contract is a B2B contract, you can instead set out negotiated termination conditions.

Limitations of Liability

Limitations of liability are clauses that limit the amounts to which a party can be liable for damages or loss. For example, if a product malfunctions and causes financial loss, a limitation of liability clause could limit this to a set monetary amount.

Limitation of liability clauses in B2C contracts are usually unenforceable if they are broad or overly restrictive. Particularly when they infringe upon consumers' rights to redress or other rights that consumers have, they are not enforceable. For B2B contracts limitations are more likely to be enforced by courts.

Here's an example of a limitation of liability clause from Oracle. This is a standard clause for limitation of liability in B2B contracts. You can see that indirect, incidental, special, punitive, consequential damages, as well as loss of profits, revenues, data, or data use, are explicitly excluded.

In addition, you can see that Oracle has limited their maximum liability to the amount of the fees under the contract.

In contrast, as set out in this limitation of liability clause from Apple for consumer products, there is a specific subsection that notes statutory benefits for consumers under what Apple refers to as Mandatory Consumer Law.

Essentially, Apple's section recognises that B2C contracts are with consumers that have rights, including in relation to limitations of liability and other clauses.

Limitations of liability are common and enforceable in B2B contracts, but much weaker in B2C contracts where consumer protection laws prevent you from contracting out of key rights.

Dispute Resolution

Dispute resolution clauses cover the process through which any disputes will be resolved, such as through mediation, arbitration, or court cases. These clauses are often quite different between B2C and B2B purchase contracts, as B2C contracts may include simpler or more accessible processes than B2B contracts.

In B2B contracts, parties usually have more freedom to decide the forum and method of dispute resolution.

Courts are also more likely to uphold whatever the parties have agreed, including arbitration clauses, forum selection clauses, and limitations on class actions. Forum selection clauses are those that specify which court or jurisdiction any dispute will take place in. They usually require the other party to waive their right to object to the forum or jurisdiction. Class action waivers may also be upheld: these clauses stop the other party from filing a class action in the event of a dispute (when many plaintiffs join together to sue).

In contrast, in B2C contracts, consumer protection laws don't allow some of these clauses. For instance, some jurisdictions limit mandatory arbitration clauses for consumers, requiring them to be fair in numerous ways. In addition, forum selection clauses are also often limited. For example, in the EU, B2C contracts can't stop a customer from bringing a claim in the court of their home country.

This example from Zalando shows a simple dispute resolution process provided by the company for a B2C contract. You can see that customers can report products that are bad quality or "fail to comply with prevailing laws". First, the report will be checked and a decision will be made.

In addition, under the Zalando clause the customer can have the decision reviewed if they don't like the outcome, with all of their usual legal rights to dispute resolution, including litigation, still intact.

In this example from a B2B sales contract from Salesforce, however, you can see that an explicit arbitration clause is set up. In many cases, B2B contracts attempt to limit dispute resolution processes to a set approach such as arbitration, partially to preserve confidentiality, and partially to reduce legal and court costs.

B2B contracts are more likely to set out more official or complex legal processes such as arbitration, when compared to typical consumer complaint processes such as in the example from Zalando.

Your purchase terms should follow these types of examples (more or less complex dispute resolution) for setting out dispute processes, depending on whether it is a B2B or B2C purchase.

How Does Jurisdiction Affect B2C and B2B Terms?

Another factor that affects purchase terms between B2C and B2B groups is the jurisdiction you are in. For example, the EU has very strong consumer protection laws. In the US on the other hand, while the Federal Trade Commission (FTC) provides consumer rights for purchases, the level of protection and enforceability varies by state.

Let's take a look at a few jurisdictions now, including case law and enforcement actions for purchase terms and their clauses.

United States

In the United States, the Federal Trade Commission (FTC) and different federal and state laws have a significant impact on purchase terms for B2C contracts.

Magnuson-Moss Warranty Act

For example, the federal law Magnuson-Moss Warranty Act applies to warranties on consumer products. It does not state that consumer products must have a warranty, but if they have one the warranty has to comply with the Act.

Some of the provisions include, for instance, that sellers need to provide warranties in set forms.

In particular, sellers must "fully and conspicuously disclose in simple and readily understood language", the terms of the warranty. This means the warranty cannot be confusing or deceptive for consumers.

The FTC enforces the Act, and can investigate you if you are deceptive with your warranties. There is information on the FTC website about warranties, to help educate both businesses and consumers about how warranties should be drafted and carried out.

You can see below some of the types of rules that the FTC is legally entitled to establish, in relation to warranties and what they should contain.

This includes, for instance:

• Identification of who is giving the warranty
• Identification of who the warranty is to
• Which products or parts are covered
• What the warrantor will do if there is a malfunction, defect, or failure to conform with the warranty
• What the consumer must do in that event
• Exceptions and exclusions
• The step-by-step process the consumer must follow to make a claim
• Information about dispute resolution

Warranties can also contain more than these features.

Uniform Commercial Code (UCC)

In relation to B2B purchase terms however, the Uniform Commercial Code (UCC) is the law that governs contracts between businesses. The UCC sets out rules for warranties, delivery of goods, breaches of contract and cancellations, among other things.

For example, the UCC includes provisions on both express and implied warranties. As you can see below, express warranties given through affirmations of facts or promises, descriptions of goods that are part of the bargain, and that samples are representative of the whole product.

You can see below that implied warranties are also covered by the UCC. The section below states that if the seller knows there is a particular purpose for which the goods are sold, and the buyer relies on this, there is an implied warranty that the goods are fit for that purpose.

However, the UCC also contains provisions for amending and disclaiming warranties in B2B contracts, leaving businesses free to remove these provisions in their agreements. The below section sets out that warranties can be excluded or modified.

However, any exclusion or modification needs to be conspicuous, and in writing.

Case Example: Warranty Clauses

In Luther A. Hunter, Appellant, v. Texas Instruments, Inc. (1986), the court noted that "A clause is conspicuous ‘when so written that a reasonable person against whom it is to operate ought to have noticed it … Language in the body of a form is 'conspicuous' if it is in larger or contrasting type or color.'"

By way of example, in Mullis v. Speight Seed Farms, Inc. (1988), an exclusion of an implied warranty of merchantability was not found to be conspicuous enough when it was simply printed on a label for seeds, among other information about the seeds, in the same writing as the rest of the label.

These laws also affect enforcement and remedies for B2B and B2C contracts. Courts would strike down clauses that contradict the statutory rights of consumers. For example, if a warranty clause that went against the Magnuson-Moss Warranty Act would not be found to be enforceable.

On the other hand warranty clauses for B2B contracts have greater flexibility to be negotiated away or excluded.

Warranties are not the only clauses treated differently in the two contexts.

Case Example: Limitation of Liability Clauses

For limitations of liability, section 2-719 of the Uniform Commercial Code (UCC) sets out that remedy can be provided for issues, if any "exclusive or limited remedy" fails of its essential purpose. You can see this clause below.

This means that if an issue arises such as a major defect in a product, and any contractual or other remedies fail to correct it, other remedies under the UCC can be claimed.

Insofar as it relates to limitation of liability clauses, this means that a contract "may limit or alter the measure of damages recoverable", and may also limit consequential damages. However, this will not be enforceable if the "limitation or exclusion is unconscionable".

When it comes to B2B contracts, courts are less likely to find that a company has fallen afoul of the UCC. For example, in Metro. Life v. Noble Lowndes (1994), a limitation of liability clause was upheld, as the court described the parties as "two sophisticated business entities" capable of determining the risk between them.

State law also affects these legal questions, as you'll see in the California section below.

You need to be careful that your sale and purchase terms are tailored for B2B or B2C contracts, because B2C clauses that are non-compliant with the law will be unenforceable, and you could be subject to penalties.

California

In California, the Song-Beverly Consumer Warranty Act and the California Civil Code apply to B2C and B2B sale and purchase agreements.

Song-Beverly Consumer Warranty Act

Under section 1792 of the Song-Beverly Consumer Warranty Act, for example, it states that "every sale of consumer goods that are sold at retail in this state shall be accompanied by the manufacturer's and the retail seller's implied warranty that the goods are merchantable", as you can see below:

Appropriate disclaimers under the Act must state that:

• the goods are sold on an "as is" or "with all faults" basis
• the risk as to the quality and performance of the goods is with the buyer
• if the goods are defective, the buyer and not the manufacturer, distributor, or retailer assumes the entire cost of all necessary servicing

California Civil Code

On the issue of limitation of liability, a recent case, New England Country Foods, LLC v. VanLaw Food Products, Inc (2025) in California, held that "a limitation on damages for willful injury to the person or property of another is invalid", even between two businesses. In this case, the court held that this clause was unlawful under the California Civil Code section 1668.

This section states, as you can see below, that "All contracts which have for their object, directly or indirectly, to exempt any one from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law".

This means that while some limitations of liability are possible in B2B contracts, and are far more likely to be upheld by the courts, limitations that exclude intentional misconduct are not permitted in some states like California.

Other sections of the California Civil Code, such as section 1670.5., state that the court can refuse to enforce an "unconscionable" clause, as you can see below:

The idea of "unconscionability" in B2B contracts has been litigated in cases such as A & M Produce Co. v. FMC Corp. (1982). In this case the court stated that unconscionability includes "an absence of meaningful choice" for one party, combined "with contract terms which are unreasonably favorable to the other party."

In this case, the court noted that "this contract arises in a commercial context between an enormous diversified corporation (FMC) and a relatively small but experienced farming company," but also explained that "a businessman usually has a more difficult time establishing procedural unconscionability."

The court ultimately found that the contract had unconscionable clauses, namely the warranty. The court stated that "the warranty allegedly breached by FMC went to the basic performance characteristics of the product. In attempting to disclaim this and all other warranties, FMC was in essence guarantying nothing about what the product would do." You can see the court's statement below:

As a result, the court found it was "unreasonable to assume that a buyer would purchase a standardized mass-produced product from an industry seller without any enforceable performance standards." This shows one example of how even a B2B contract can have an unfair clause struck down, if the term is unfair enough.

Now let's take a look at some other jurisdictions.

European Union

The European Union (EU) provides protections for consumers under the Consumer Rights Directive (CRD). The Unfair Terms Directive (93/13/EEC), also applies to contracts, including B2B purchase terms.

Consumer Rights Directive (CRD)

The CRD sets out rights for consumers, such as delivery obligations and a right of withdrawal. For example, Article 9 covers the right of withdrawal, which allows a consumer to cancel a contract within 14 days without giving a reason. This is also called a "cooling off period".

There are some exceptions to the 14 day cooling off period, set out in Article 16 of the CRD. These include situations such as:

• The contract was for a service, and the service has already been fully performed
• The goods are financial products, e.g. shares or bonds
• Personalised products
• Sealed goods that can't be returned, e.g. health products
• Goods that have been inseparably mixed with other goods
• Sealed audio or video recordings
• Newspapers
• Items sold at auction
• Digital content which is not supplied on a tangible medium, if it has already begun being used

Digital goods, as stated above, can only be returned within the 14 day cooling off period if they have not been used already, such as a game already being played.

The sale of digital content is a common occurrence, and laws have also been updated to include these goods. For example, the Directive 2019/771 on the Sale of Goods, also sets out that consumers have a right that goods they purchase must be "in conformity with the contract". This is independent of whether or not you provide an explicit warranty or guarantee in the contract. When it comes to digital goods, they have particular requirements for conformity.

The idea of "conformity" as defined in the Directive, means that goods (generally) have to match the description of the seller, be fit for purpose, have reasonable quality and performance, and have reasonably expected accessories, instructions, and updates. This is set out in Article 6 below.

These rules on conformity can also vary by jurisdiction slightly, even within the EU. For example, in most EU countries, if lack of conformity is discovered within two years of the sale, the consumer can make a claim. However, in Spain, this claim period is three years.

For digital goods specifically, Article 7 sets out requirements for their conformity. You can see this in Article 7(3) below:

This includes that the consumer must be informed about and supplied with updates, including security updates, that are necessary to keep the digital goods in conformity. The length of time these updates will be required depends on the customers' reasonable expectations, the type and purpose of the goods, as well as the circumstances and nature of the contract.

Aside from these laws, the Digital Content Directive also applies to "any contract where the trader supplies or undertakes to supply digital content or a digital service to the consumer and the consumer pays or undertakes to pay a price."

Digital Content Directive (DCD)

The Digital Content Directive sets out a number of conformity requirements, in Articles 7 and 8, which are similar to requirements in other EU consumer laws, although not the same. For example, Article 8 outlines below that the digital content or digital service must:

As noted in the image above, digital content or digital service must:

• Be fit for the purposes for which digital content or digital services of the same type would normally be used
• Have the quantity and possess the qualities and performance features, including in relation to functionality, compatibility, accessibility, continuity and security, normal for digital content or digital services of the same type
• Be supplied along with any reasonably-expected accessories and instructions
• Comply with any trial version or preview of the digital content or digital service

Importantly, these are consumer rights that are established by law. This means you cannot waive them or exclude them. In the EU, European Courts also support this idea. This means your B2C purchase terms must incorporate these protections. On the other hand, if you are contracting with businesses you have greater flexibility to draft terms that allocate risk more freely.

Any warranty or guarantee that you include in a contract for B2C purchases in the EU, should comply with these directives. A non-compliant clause is unlikely to be enforced, as consumers have rights that are separate from what the contract contains.

Unfair Terms Directive

The Unfair Terms Directive covers unfair contract terms in consumer contracts. A term is considered to be unfair if it creates a "significant imbalance" between the parties, and is bad for the consumer.

In addition, in the EU, courts are likely to void clauses completely. For example, in Banco Español de Crédito v Camino, the ECJ ruled that a 29% default interest clause was unfair. Part of the consideration for B2C contracts was that there is an "imbalance which exists between the consumer and the seller or supplier". The clause was ruled to be void, and removed from the contract.

The ECJ also held under the Unfair Terms Directive in Kásler v OTP Jelzálogbank that terms in B2C contracts should be both "grammatically intelligible" and transparent.

This highlights the ways in which B2C contracts are treated differently when compared to B2B contracts, with courts holding significant concern for consumer rights, consumer understanding, and the imbalance of power between the parties.

These factors and laws must be kept in mind when you are drafting purchase terms for either B2B or B2C contracts in the EU.

Australia

In Australia, consumer rights are governed by the Australian Consumer Law (ACL), which is part of the Competition and Consumer Act 2010 (Cth). Even if your T&Cs try to exclude or limit liability, many protections cannot be waived.

For B2B contracts, the ACL still applies in certain cases, but with narrower scope. As of November 2023, the unfair contract terms regime under the ACL applies to standard form contracts with small businesses (fewer than 100 employees, or under AU$10 million annual turnover). If both parties are outside the small business definition, the contract is largely governed by general contract law. Businesses are expected to negotiate and protect their own interests.

Australian Consumer Law (ACL)

Under the Australian Consumer Law (ACL), a schedule to the Competition and Consumer Act 2010, consumers have statutory rights and guarantees that can also not be excluded by contract.

In addition, B2B and B2C contracts are both covered by the ACL, depending on the size of the transaction between the parties. This means that in Australia, B2B and B2C provisions are blurred somewhat. Since 2021, "suppliers who provide goods or services valued between $40,000 to $100,000 to any person … will now be subject to certain aspects of Australian Consumer Law".

Statutory guarantees under the ACL are similar to other consumer protection laws, and include that goods must be of acceptable quality, fit for purpose, and match their description.

For larger businesses and transactions, more flexibility in sales contracts applies, like in other jurisdictions.

One key case for B2B contracts is Australian Competition and Consumer Commission v JJ Richards & Sons Pty Ltd (2017).

In this case, JJ Richards, a waste management company, used standard form B2B contracts with small businesses that contained unfair terms, such as automatic renewal, unilateral price increases, and restrictions on termination.

One of the key factors was whether the terms had created a "significant imbalance" between the parties. This was mentioned by the court as one of the factors in section 24 of the ACL, which determines whether a contract is unfair, as you can see below:

The court found these terms were invalid under the ACL, even though the contracts were B2B contracts, as you can see in the conclusion below.

For B2C contracts, Australian Competition and Consumer Commission v Ashley & Martin Pty Ltd (2019). Ashley & Martin, a hair loss treatment provider, was found to have unfair terms in consumer contracts. These included limitations of liability and restrictions on refunds. One of the statements by the court was a list of key types of terms that can be unfair under the ACL:

In this case, the court also found the terms to be unfair under the ACL. One of the court's main interests was stated as protecting consumers from standard form purchase agreements provided by businesses that are inherently unfair to consumers, who do not have the same information or opportunities as the business to verify the product or its use.

From these pieces of legislation and case law, it is clear that B2C contracts and B2B contracts are treated very differently in jurisdictions across the world, but the nuances of what will be unfair or unenforceable can vary.

Summary

Any contract for a B2B or B2C purchase needs to be tailor-made for the jurisdiction and the parties involved. Warranties, cancellations, limitations of liability, and dispute resolution clauses are particularly important.

Jurisdiction also has a significant effect, although most countries have established consumer protection laws that ensure warranties are provided, cancellations are easy, and unfair terms are not upheld for consumer contracts. Businesses are generally held to a higher standard and presumed to be more sophisticated negotiators.

Make sure your purchase terms are appropriate to the buyer, and consider what effect your jurisdiction and local laws have on which consumer-facing or business contract laws may apply to you.