What’s a Terms and Conditions Agreement?

Note that you’ll sometimes see this agreement referred to as a Terms of Use, User Agreement or Terms of Service agreement. These terms are interchangeable and refer to the same type of agreement.

The purpose of a Terms and Conditions agreement is to prevent misunderstandings between the business owner (you), and the consumer. The agreement helps you:

• Protect your intellectual property
• Avoid website abuse
• Define the limits of your legal obligations to the consumer

Essentially, the T&C helps you run your business more effectively and with greater peace of mind.

This agreement forms the basis of an enforceable legal relationship. It tells anyone browsing your website, whether they are a casual visitor or an active client, what their legal responsibilities and rights are.

It also gives you, as the business owner and service provider, authority over certain undesirable things that a consumer may do on your website. However, let’s consider the specific reasons why business owners should always include a Terms and Conditions agreement on their website.

Termination Clause

Just as you should list examples of unacceptable behavior, you should explain what you’re entitled to do if a user violates the agreement.

Again, YouTube does this very effectively.

The below clause explains that YouTube may or may not remove content that violates its rules, and it may or may not ban the offending user.

This gives YouTube scope to act quickly to terminate the account without giving the offending user the chance to respond. Clearly, a broadly worded clause like this one benefits you as opposed to the user, and we recommend including a clause of similar wording in your Terms agreement.

Jurisdiction Clause

You should clarify what national law you wish to have govern the agreement between you and the users. This is helpful because you can choose your local courts and laws where your business is based.

 for example, notes that all users consent to being governed by California law if they use the site:

Setting out the jurisdiction in the Terms and Conditions clarifies which courts are responsible for managing serious disputes between parties should they arise. It’s important that both you and the user understand where you are entitled to sue.

Limits on Liability Clause

A limitation of liability clause lets you legally mitigate your responsibility for things that may go wrong on your website.

 for example, explains that it will exercise reasonable care and skill in delivering users the services.