Terms & Condition
A Terms & Conditions (T&C) agreement is an important agreement for all businesses, including small businesses. It dictates the rules for your products and services and lays out expectations for you and your customers.
It is difficult for a new business owner to spend time on a T&C when when there is 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.
Here’s how that works.
- 1. The necessity of a T&C
- 1.1. Assure cash flow
- 1.2. Mutual understanding
- 2. Drafting the T&C
- 2.1. Essential provisions
- 2.1.1. Clear description of products or services
- 2.1.2. Payment terms
- 2.1.3. Warranties or guarantees
- 2.1.4. Liability limitations
- 2.1.5. Refund or return policies
- 2.1.6. Delivery timelines
- 2.1.7. Privacy statement
- 2.1.8. Remedies in case of breach
- 2.1.9. Terminating the agreement
- 2.1.10. Governing law
- 2.2. Providing it to customers
- 3. Drafting tips
The necessity of a T&C
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 T&C available to your customers for two main reasons:
- To assure your cash flow, and
- To encourage mutual understanding
Assure cash flow
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.
Drafting the T&C
Here are the essential provisions you want to include and how to make them available to your customers.
Our Terms and Conditions Generator makes it easy to create a Terms and Conditions agreement for your business. Just follow these steps:
- Click on the “Terms and Conditions Generator” button.
- At Step 1, select the Website option and click “Next step“: