Terms and Conditions vs Terms of Business

by | Nov 19, 2021

Let’s jump straight into answering the questions before we look into why there’s so much confusion around these two and many other similar terms.

What’s the difference between ‘terms and conditions’ and ‘terms of business’?

Nothing. There is no legal difference between contracts or agreements of either title, despite how they’re named, where they appear, or the products or services they apply to.

To put matters simply, they are the general terms of operation and the rules a business or organisation provides to protect itself when transacting with clients, customers, partners, or anyone else during the daily processes of their enterprise.

It’s further complicated (or simplified, once you realise all of these different titles relate to the same thing) when you add ‘terms of use’, ‘terms of service’, ‘terms of sale’, ‘T&Cs’, and an array of other similar phrases to that same list.

Whether they relate to the sale of a product or a service the business provides, they still amount to the same thing: the rules you accept if you choose to do business together.

In this article, we’re going to look into a few common questions about business terms and conditions, such as:

  • What is a ‘terms of business’ contract?
  • Are terms of business legally binding?
  • Can I copy terms of business or use a ‘terms of business’ template?
  • How to write a ‘terms and conditions’ for website or offline use.

What are terms and conditions?

Terms and conditions are everywhere.

The phrase ‘terms and conditions’ in our case lends itself to a business’s rules of operations. However, you’ll find terms and conditions in every contract, agreement, disclaimer, policy, service pact, and more; in fact, everywhere you engage in a deal where money changing hands is involved.

They’re part of employment contracts, hire agreements, pension policies, email accounts, websites, apps, NDAs, financial, healthcare, entertainment, mobile phone, and credit contracts, privacy policies, SaaS agreements—let’s face it, they’re everywhere.

These specific rules protect a business from being taken advantage of and restrain the customer or client from knowingly breaking them. They help both parties achieve the transaction they expect and protect both from unfair behaviour at either side of the deal.

What are terms of business?

As discussed, ‘terms of business’ are almost always the same as a ‘terms and conditions’ agreement; it’s just another way of labelling them. Terms of business can feel like a better fit for companies providing a service or selling software as a service, but there’s nothing to say which phrase or heading should be used—it’s whatever feels better in each situation.

What is a terms and conditions contract?

Each ‘terms and conditions’ contract can take several forms.

It can be a physical document both parties sign before commencing operations or a partnership.

It can be a page on the company website outlining the rules of operation each user agrees to, clicking an approval box during a transaction, typically within the payment process.

There’s also an acceptance that on websites that don’t collect sensitive data from their customers—for example, personal details or payment information—that by providing a document accessible from each page of the site, their clients accept the rules on a take-it-or-leave-it basis.

However the rules are presented and agreed to, they constitute a verbal or written contract between supplier and customer. However, having a written set of accessible terms is a must if such rules need to be relied on in later mediation.

Are terms and conditions legally binding?

Yes, but they have to satisfy specific criteria to ensure they are.

Each business is unique, and their contracts should be too. We’ll look into what a T&C agreement contains shortly, but what it must be is relevant.

You’ll find some contracts are full of technical terms and legal jargon designed to confuse the customer or client. This type of behaviour is considered bad practice, as areas of confusion are often held against the supplier when a matter ends in court. However, that doesn’t mean you have to dumb things down too far; using technical terms in industry-specific contracts is entirely acceptable, as long as they aren’t intentionally confusing customers.

A contract needs to be clear, legible, and relevant to the operation of the business. They also need to be read and agreed to before the transaction begins.

There are several offline situations where terms and conditions are typed in small print on the back of an order form or a document only available after the transaction has begun. When a customer places an order before the delivery of the terms, the terms are invalid during later action. Similarly, checking a T&C checkbox at the wrong stage of an online transaction will invalidate even the most correctly compiled set of terms and conditions.

How to write terms and conditions

Certain matters should be addressed in every contract, including:

  • The definition of the contract
  • Business procedures
  • Protection of the business’s rights
  • To limit liability

When providing terms and conditions on a website, give them their own page, in large, clear type that anyone can read. Not only does this promote transparency, but it also provides a single URL to link to from other materials referring to your business terms and practices, for example, in brochures, quotations, correspondence, order confirmations, and delivery notes.

Elements often included in terms and conditions agreements

Terms that outline specific purposes typically include:

  • Rights
  • Definitions of misuse
  • Duties
  • Obligations
  • Duration
  • Roles
  • Responsibilities
  • Service and product delivery
  • Returns and refunds
  • Descriptions of goods and services
  • Defective goods and services
  • Considerations
  • Contact information
  • Dispute management
  • Opt-out policy
  • Payment details and terms
  • Limitations

Legal aspects typically include:

  • Intellectual property rights
  • Privacy policy (often linked to a separate set of more specific terms)
  • Termination clauses
  • Governing law
  • Limitation of liability
  • Arbitration
  • Confidentiality
  • Indemnification
  • Severability
  • Definitions

Can I copy terms and conditions or use a terms and conditions template?

Adapting another business’s terms and conditions might look like an easy way to save money at first glance, in the same way using a standard template contract would appear to be.

However, nobody should take that kind of risk with their business. When it comes to legal matters, your business terms protect you against any client making a complaint. If there are any holes or omissions in your terms, they leave you vulnerable to prosecution.

It’s imperative to have the correct terms and conditions specifically designed to protect your business. That means engaging with professional services, specialists with the knowledge and experience to protect you from every angle. Your terms need to be legally correct, enforceable and built to serve their purpose.

Engaging with legal services: the specialists who know how to write terms of business

A professional contract delivers the guarantees and peace of mind that a DIY contract can’t. So whether determining how to write a ‘terms of business’ for website or offline use, there are valid reasons for seeking professional assistance.

  1. They understand how contracts work – A poorly put together contract or agreement leaves gaps and loopholes that put you at risk. A legally delivered set of terms closes any such eventuality, providing a complete level of protection.
  2. Contracts are fit for purpose—guaranteeing enforceability – With a complete understanding of contract law, utilising a legal professional ensures protection from the very first steps of your processes and a contract that provides enforcement of those rules.
  3. Conforms to modern contract law – Contract law can be incredibly complicated whether you operate nationally or internationally.
  4. Optimum preparation in case of disputes – Even with the best intentions, disputes will inevitably happen. A professionally delivered set of terms provides the highest quality protection for your business in the event of a customer or client raising any complaint or action.
  5. Safeguards for specific industry situations – Not all standard terms or policies offer the appropriate cover for industry-specific circumstances and disputes.
  6. Battle of the forms’ situations and negotiations – Provision for cases where both buyer and seller have differing terms and conditions to adhere to.

While it isn’t a legal requirement to have terms and conditions drawn up by a lawyer or solicitor, it makes sense to buy the protection and peace of mind a legal professional offers.

Summing up: Terms and Conditions v. Terms of Business

While the two terms cover the same sets of rules despite their differing monikers, the most significant point to note is how important they are when it comes to protecting your business.

We can’t stress enough, every situation and business is unique; the terms created to protect their needs to be an expedient match in every situation. Contract law holds all the answers every business needs, therefore employing a specialist to create the perfect guidelines for customers and clients with a shield against any disputes further down the line is crucial.

 

Let’s chat…

The above is intended as guidance only and does not substitute legal advice. Please browse our existing Terms and Conditions services or get in touch with LegalDrop via our contact page if you need assistance.