Blog Post

Drafting Website Terms and Conditions for a New Business

Michael Brennan • Nov 01, 2017

Setting up a website with on online store is a relatively easy task, but ensuring that interactions between owner and customer run smoothly isn’t always as simple.

Starting a business these days is easier than ever. Web development sites provide easy-to-use do-it-yourself templates, products can easily be ordered online from manufacturers, marketing has become more of an automated process and payment processing software ensures that a new business owner gets paid. Setting up a website with on online store is a relatively easy task, but ensuring that interactions between owner and customer run smoothly isn’t always as simple. Chances are that, at one time or another, each and every one of us has been dissatisfied with a purchase. Sometimes sellers are quick to remedy any dissatisfaction a customer may have, but other times it’s a challenge to even get a seller to admit it’s wrong, yet alone convince it to give you a refund or replacement product or service. Needless to say, disagreements between a buyer and seller are not always pretty and many times it isn’t clear whether there was just a misunderstanding about what was being sold or whether the seller is actually in the wrong.

Use terms and conditions for your new business to set out expectations upfront

When starting a new business it is important to realize that the inevitable disagreement will arise and dissatisfied customers are going to make (un)reasonable demands for how it should be resolved. One essential document that any prudent new business owner can and should have in order to mitigate some of these disagreements is terms and conditions which can address the use of the business’ website and sale of its products.

Terms and Conditions ensure that the parties are clear on what the transaction is and isn’t upfront. Oral contacts are enforceable in many situations, but there is one glaring problem with any alleged oral contract. Evidence. Determining the initial agreement basically comes down to a “he said, she said” situation where each party may remember facts, conversations and circumstances a bit differently. Additionally, by the time a dispute does arise, chances are a fair amount of time has passed since the initial agreement was made and the parties don’t remember all the details of exactly what was agreed upon. When a business has clear terms and conditions, it is clear when a customer (or the business) has breached the contract. Additionally, written contracts are much easier to enforce in the event of a disagreement.

The benefits of having an experienced attorney involved in drafting terms and conditions for a new business are plenty. An attorney can ensure that bases are covered from a legal standpoint, potential risks and conflicts are considered and there is clarity in explaining rights and responsibilities to any potential customer. However, no one knows a business like the owner, so the owner’s involvement in drafting any document is also imperative.

While addressing legal concepts, like limitation of liability, dispute resolution, force majeure, warranties, applicable laws, etc., is an important part of any set of terms and conditions for a new business, the document should be more than just a regurgitation of legalese. Effective terms and conditions need to set forth the rights and responsibilities of both the business and the customers. They should explain the effect of using the website and online store, obligations relating to payment, shipment, and satisfaction as well as what the customer can expect when he or she receives any products.

Lay out exactly what the customer should expect when buying the product

When drafting terms and conditions for a new business, a business owner should put himself in the shoes of a potential customer and think about possible questions that could arise relating to the purchase.

For example:


  • What results does a customer expect when he or she decides to make a purchase?
  • Is the customer expecting the goods to adhere to a certain level of quality?
  • When should the client expect the goods to be shipped and delivered?
  • When will credit cards be charged?
  • What happens if the customer is dissatisfied with the order? Will they pay for the return postage?
  • What will the remedy be- will they receive a refund? A replacement product?
  • Does the customer need to understand that certain performance issues and timeframes are dependent upon the customer providing specific information in a timely manner?
  • What will happen if the products are no longer in stock?
  • Will there be different shipment options?
  • What happens if the carrier doesn’t get the products to the customer at the time indicated?
  • Will there be a procedure for cancelling an order and will a refund be issued?
  • If a subscription is being sold will there be a penalty for early cancellation?
  • Will the customer be charged taxes (sales or other)?

Define the Scope of Work

If the business is selling anything other than an individual product, it is important for the business to have terms and conditions that explain the scope of work that will be performed for the customer. Basically, what is the customer getting for their money? In the legal industry lawyers and potential clients discuss all sorts of issues that the potential client may want the attorney’s help addressing. The potential client and attorney may agree to tackle everything, or more likely, they may agree to tackle only a set of specific issues in which the attorney is experienced. This is always set out in a detailed retainer agreement which explains how much work the attorney is going to do, what he will be involved with, and what issues the client and attorney will not work on together. Like an attorney, any business selling services should endeavor to set out exactly what services will be provided and what will be excluded. Remember, an important goal of putting terms and conditions in place for a business should be full disclosure of every aspect of the relationship between buyer and seller. Doing the leg work upfront reduces the possibility that a messy disagreement will arise in the future.

Upsell Your Services and Use Terms and Conditions as a Marketing Tool

Finally, don’t overlook the opportunity that written terms and conditions present for marketing the business, either. Having terms and condition for a business shows that it’s a legitimate operation. They show that the business is sincerely concerned with how disputes should be handled and that it has given thought to the customer’s experience using its website and online store. Additionally, by writing terms and conditions in easy-to-read language a business can show potential customers that it is customer focused and doing everything it can to ensure the customer is comfortable with any transaction.

By Michael Brennan

Michael F. Brennan runs a virtual law office helping entrepreneurs in Illinois, Wisconsin, and Minnesota launch and build new businesses. He can be reached at michael.brennan@mfblegal.com with questions or comments, or check out his website at thevirtualattorney.com.

The information contained herein is intended for informational purposes only and is not legal advice, nor is it intended to create an attorney-client relationship. For specific legal advice regarding a specific legal issue please contact me or another attorney for assistance.

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