Make Terms and Conditions and Privacy Policies for a Business

Terms and conditions and privacy policies are important legal documents for any business to have. Terms and conditions spell out each the rights and obligations of the business and the customer. Privacy policies describe how businesses maintain and use customers’ personal information. You can find resources on the internet to help you draft your own terms and conditions and a privacy policy to suit your particular situation, but you should always consult with a small business attorney before finalizing these crucial legal documents.

Steps

Preparing to Draft Your Terms and Conditions

  1. Understand terms and conditions. Terms and conditions (T & C) set the foundation for customer interactions with your business, and define how your business will interact with its customers. They spell out your procedures and processes, limit your liability, and set forth the agreements that you and the customer have agreed to be bound by. You can think of them as a contract between your business and your customer. They will govern what your rights and responsibilities are as a business, and what your customer’s rights and responsibilities are.
    • You can often find a “boilerplate” Terms and Conditions that you can use as a guideline to create your own.[1][2]
  2. Learn the basic areas that T & C address. The exact information provided in your T&C will depend on the type of business that you have. However, there are several basic areas that almost all T&C should address:[3]
    • Products and services.
    • Prices and payment.
    • Guarantees and warranties.
    • Copyright and trademarks.
    • Termination of service.
    • Governing law, You should include a provision stating the law governing your terms and conditions (i.e., your own state law).[2]
    • Changes in agreement. You will want to include a clause stating that you may modify the terms and conditions at any time.[2]
  3. Make a list of the terms and conditions your business needs. After reviewing the types of terms and conditions, it will become clear which ones apply to your specific situation and which ones do not. Write down the ones you should include in your own document.
    • Most every company will want to include the copyright, changes in agreement and governing law provisions.
    • All companies selling products will need to include a return, refund and loss provision.
    • Any company offering services should include a termination of service provision.
    • If you link to other sites, you definitely want to include a link to sites provision.
    • If you allow comments on your site, you should include a provision limiting your liability for things like slander.[4] [2]
  4. Identify and review generic terms and conditions. You can start by finding generic terms and condition templates on the internet.[2] You can even find them tailored to specific countries, like the United Kingdom.[5] Referring to your original list, find the clauses you need from the templates. You may wish to print out the templates so you can circle what is relevant to your situation and mark out what is not. Pasting them into a computer document can also work well.
    • Be mindful that every business is different. It is for this reason that when use a generic template, you always read it through carefully to examine what aspects apply and do not apply to your business. Never use a generic template without thoroughly reading it.
  5. Find and review sample terms and conditions from similar companies. After looking at a generic template, look at the terms and conditions of a company that is similar to your own. For instance, if you sell products online, you might take a look at an online retailer’s terms and conditions.[6] If your business provides a service (e.g., installing heaters and air conditioners), go to the website of a reputable heating and air conditioner company to view its terms and conditions. You may wish to print out the terms and conditions so you can circle what is relevant to your situation and mark out what is not.

Drafting Your Terms & Conditions

  1. Refer to your samples. Once you have considered your company’s needs and performed all your research, you are ready to draft your own terms and conditions. Referring to the terms and conditions you gathered, pick and choose certain sentences or whole paragraphs that apply to your company. If you found a sample that works exactly, feel free to use it in its entirety. In that situation, you can track your sample and prepare your terms and conditions from that document alone.
    • Samples from companies similar to your own will work the best.
    • Using your samples, you will be able to go through all the main T & C areas previously listed (like products & services), and use the relevant information you identified in the sample to create your own T & C.
  2. Define what products and/or services your business will provide to the customer. Starting with products and services, make sure to define any terms that might cause confusion, such as the use of “goods” to refer to physical products or services performed. In addition, you should include information about how your policies regarding those products and services will be communicated to the customer.
    • For example, “Our return policy for Product X is available on our website and is also printed on all invoices and statements.”
    • Tailor any information from samples to your own business's products and services.
  3. State the terms and conditions related to pricing and payment. You should have a section stating what types of payment you accept, when payment is due, and what will happen if payment is not received on time or in the correct amount. You should also include information about what the price does and does not include (for example, whether the price includes taxes and fees). Any information about possible price increases should be included here.
    • This section also includes information on returns, refunds and losses.[4] If you accept returns, you will want to notify your customers of your return policy (e.g., 30 days after purchase). If you give refunds, you should let customers know the terms.
    • You might also want to include a loss disclaimer. A disclaimer is a statement that informs customers you are not liable for certain types of losses.[4] For instance, you could include a disclaimer stating you are not responsible for products that break on return shipping.[4]
  4. Clarify guarantees and warranties. Establish the terms of any guarantees or warranties, including for how long they are valid and what conditions would void them.[3]
  5. Provide copyright notices. To protect your original work you should provide copyright notices. A copyright notice simply tells the world that your work is original and is protected under copyright law. A copyright notice should contain: the word “copyright" and a “c” in a circle (©) as well as the date of publication and the name of the author and/or owner of the copyright.<[7] If you have any trademarks, you will want to make sure to note those on your website as well.[8]
    • If your business involves a website or social media where customers may post, you should also differentiate between what is your intellectual property and what, if anything, remains the customer's intellectual property.
  6. Offer information on how to terminate the relationship. You should include information on how customers can terminate their relationship with your business. This could include how to close or cancel an account, as well as how to terminate any services you are providing the customer.[2]
  7. Limit your liability. Businesses can be held liable for a variety of things unless their T&C has specific languages that limits liability.[9] For example, if you own a gym, you would want to limit your liability by saying that you are not responsible for people who injure themselves on your property. Include a disclaimer that specifies what you will not be held liable for.
    • As another example, if your business includes a website or social media, you would want a disclaimer to explain that you are not responsible for the accuracy of comments made by third parties. It can also state that you do not endorse those comments.[4]
    • Another common type of liability is for theft of personal information. If you do not keep customers’ information safe, you may be liable for the losses they incur due to that theft. However, you could possibly include a disclaimer refusing responsibility for information theft if the customer does not use a secure password.
    • While your disclaimer will not wholly shield you from a claim by an injured party, it might minimize your damages.[4]
  8. Enlist the services of an attorney to review your work. An attorney specializing in contracts can ensure your terms and conditions include everything you need to protect yourself and your business. He or she can also make sure your document complies with existing contract laws. You can read more about contract laws online.

Understanding Legal Requirements for Privacy Policies

  1. Determine whether you need a privacy policy. If you gather personal information from customers, whether through transactions or through them visiting a website or social media page, you should have a privacy policy in place. A policy is your promise to users on how you will collect, use, share and protect their data.[10] The Federal Trade Commission (FTC) regulates privacy concerns in the U.S. The agency discusses the importance of privacy and policies on the FTC website. The Small Business Administration (SBA) also recognizes the importance of privacy and privacy policies on the SBA website.
  2. Understand the types of clauses in privacy policies. Privacy policies contain a number of different clauses. These include but are not limited to these types of provisions:[11]
    • What information you collect. You might collect email addresses or more sensitive information like phone numbers, addresses, credit card numbers, or social security numbers.
    • How you use the information you collect. You might use the information to better communicate with customers or to bring them new products.
    • If you disclose the information to others, and to whom. For example, if you use a shipping company to whom you provide customer information, you will need to include this information in your privacy policy.
    • That you may change the policy at your discretion. Reserving the right to modify your own policy is important.[4]
    • Log data provision. Such a provision tells users certain information is logged on the browser they are using and server you are using.[11]
    • Cookie clause. Websites generally store cookies on computers and this type of clause notifies users as such.[11]
    • Contact information for users who have privacy questions or concerns. You should provide users a way to contact you if they have any questions about your policy.
    • Clauses if you serve persons under 13 years of age. If your website serves those under 13 years of age, you need to learn the privacy rules specifically for children.[4] You can visit the Federal Trade Commission’s website to read these rules.
    • Provisions for healthcare companies. If your company provides healthcare services to the public, you may be required to have a Health Insurance Portability and Accountability Act (HIPAA) privacy policy. You can learn about the rules regarding a HIPAA privacy policy by reviewing the Department of Health and Human Services’ website.
  3. Make sure you don’t promise more than you can perform. A common error in privacy policies is to say something such as “We do not share your personal information with any third party.” Unfortunately, because of the nature of sales transactions and online operations, there’s basically no way to avoid some sharing of this information. For example, the bank processing a credit card payment from a customer must have at least some of the customer’s information. Making statements such as this could land you in trouble, which is why it’s important to get your privacy policy reviewed by an attorney.[12]
  4. Find and review sample privacy policies from reputable sources. Type “privacy policy” into any search engine to pull up privacy policies from different companies.[4] Yahoo’s privacy policy is just one good example.[4][13] You can also refer to other sites, such as the Better Business Bureau or Small Business Association, for templates.[14].

Drafting the Privacy Policy

  1. Draft your own privacy policy using the samples as guidance. It may be easiest to print out the policies or cut and paste them into a computer document. As you review other privacy policies, make notes as to what does and does not apply to your situation.[4] Discard anything that is clearly not applicable. Keep in anything that applies to your situation. Revise things that apply but need tweaking to better fit your situation. After you’ve reviewed and marked up the samples, use your notes and the sample to draft your own privacy policy.
    • Provisions discussing the information you collect and how you use and disclose it should be in your agreement.[11]
    • A clause stating you may change the policy should be in your agreement.[4]
    • A provision that certain information is logged on browsers and servers should be in your agreement (i.e. a log data provision).[11]
    • A clause stating you may store cookies on their computer, should also be included.[11]
  2. State the policy. You must clearly explain how you collect, manage, and use customers’ personal information. This is especially important if you use the internet to process payments (most businesses do), or if you use surveys and other marketing tools to collect customer information.[14]
    • If you are writing a privacy policy that includes your website and/or social media, you should also explain things such as your cookie policy (how your website stores your customers’ browsing data) and how you share customer information with others.
    • If your business would ever collect information from children under 13, you will also need to make sure that you comply with the COPPA (Children’s Online Privacy Protection Act).[15] The FTC’s website offers some helpful suggestions about complying with this rule.
  3. Offer the customer a choice. A good privacy policy will allow customers to exercise some choice about what your business does with their data. For example, you could offer an option for customers to opt-out of future communications; in the US, the CAN-SPAM ACT requires online communications to have an opt-out or unsubscribe feature.[16]
    • Provide access to this data. Your customers should be able to review the data you have collected, change or correct any mistakes, and request that you delete data for any reason.
    • Provide a way to file a concern or complaint. You should make it clear and easy for customers to contact you with any concerns or complaints they have about their data.
  4. Secure the data. Provide a clear, accurate statement about how you collect and secure your customers’ data. In some cases, you may not even know how all of your customers’ data is collected, particularly if your business uses tools such as mobile apps and cloud storage. The FTC recommends that you speak with an attorney who specializes in online law, or an information technologies expert, to help you understand exactly how and what you are collecting and storing.[14]
  5. Provide updates. Your privacy policy should note that it may change, and should make changes to that policy clear and accessible. For example, you might send an email announcing changes, or you might post an updated link to your social media accounts.
  6. Retain an attorney to review your work. An attorney specializing in privacy laws can ensure your policy includes everything you need to protect yourself and your business. He or she can also make sure your document complies with existing privacy laws. You can learn more about privacy laws at the Small Business Administration website.

Warnings

  • The information provided above constitutes general information related to the law. It does not constitute legal advice. If you are seeking legal advice, you should consult a lawyer.
  • Not all legal forms and templates are created equal. Some of the templates online may not comply with applicable law. Take care when identifying and relying on sample documents, on the internet.

Related Articles

Sources and Citations

  1. ↑ https://www.sba.gov/content/contract-responsibilities
  2. ↑ 2.0 2.1 2.2 2.3 2.4 2.5 https://termsfeed.com/blog/sample-terms-and-conditions-template/
  3. ↑ 3.0 3.1 http://www.theguardian.com/small-business-network/2013/feb/06/terms-and-conditions-small-business
  4. ↑ 4.00 4.01 4.02 4.03 4.04 4.05 4.06 4.07 4.08 4.09 4.10 4.11 http://www.nolo.com/legal-encyclopedia/website-terms-conditions-29759.html
  5. ↑ http://www.seqlegal.com/free-legal-documents/website-terms-and-conditions
  6. ↑ http://help.walmart.com/app/answers/detail/a_id/8/~/walmart.com-terms-of-use
  7. ↑ http://fairuse.stanford.edu/overview/faqs/copyright-protection/
  8. ↑ http://www.smallbusinessbuilding.com.au/improve-my-existing-business/contracts-legal-and-employment/how-do-i-write-a-terms-and-conditions-statement/
  9. ↑ https://www.sba.gov/blogs/general-business-liability-insurance-how-it-works-and-what-coverage-right-you
  10. ↑ https://www.sba.gov/content/privacy-law
  11. ↑ 11.0 11.1 11.2 11.3 11.4 11.5 https://termsfeed.com/blog/sample-privacy-policy-template/
  12. ↑ http://www.businessweek.com/smallbiz/running_small_business/archives/2009/08/why_web_site_pr.html
  13. ↑ https://policies.yahoo.com/us/en/yahoo/privacy/index.htm
  14. ↑ 14.0 14.1 14.2 https://www.sba.gov/blogs/7-considerations-crafting-online-privacy-policy
  15. ↑ https://www.ftc.gov/tips-advice/business-center/guidance/complying-coppa-frequently-asked-questions
  16. ↑ http://www.sba.gov/content/online-advertising-law
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