If you run an ecommerce business, terms and conditions (also known as a terms and conditions agreement) are a valuable asset. Terms and conditions protect your ecommerce site by laying out the rules of use and establishing your property rights. This can help you avoid and resolve potential legal issues.
In this article, we’ll explain what a terms and conditions agreement includes and why it’s important, and take a look at some example terms and conditions for ecommerce sites. Download our free ecommerce terms and conditions template below to get started on your own.
1. What Are Terms and Conditions?
2. Does My Online Shop Need Terms and Conditions?
While it’s not legally required for ecommerce websites to have a terms and conditions agreement, adding one will help protect your online business.
As terms and conditions are legally enforceable rules, they allow you to set standards for how users interact with your site. Here are some of the major benefits of including terms and conditions on your ecommerce site:
1. Prevent Site Abuse
By setting guidelines on proper site usage, terms inform users what constitutes acceptable actions when using your site, and the consequences of breaking those rules.
Examples of unacceptable behaviors include spamming, using bots, or posting defamatory content. Having terms and conditions allows you to take action against site abusers by banning them or terminating their accounts.
2. Limit Liabilities
Terms and conditions can protect your ecommerce business from being held accountable for liability issues, such as:
- personal injury
- loss of profits
- computer malfunction
- product misrepresentations
- warranty issues
Limiting your business’s liabilities could save you thousands of dollars in legal fees down the road.
3. Protect Your Property
As the owner of your online store or shop, you also own your website’s content, logo, page designs, and any other brand-related materials you produce.
Use your terms and conditions to inform users that your properties are protected by copyright and trademark laws, and set the rules for how others can lawfully use your materials.
4. Minimize Disputes
A well-drafted terms and conditions agreement will minimize your chances of legal disputes, as all the rules are clearly laid out for customers to see.
In the event that disputes do arise, your terms and conditions (specifically, a dispute resolution clause) sets out a plan for resolving conflicts with limited difficulty.
5. Establish Trust
Terms and conditions help your ecommerce business establish trust and transparency with customers by clearly outlining the rules of using your site. By explaining the legal basis on which your business runs, customers are less likely to have misunderstandings or mismatched expectations about your online store.
3. What to Include in Terms and Conditions for Online Stores
Although terms and conditions will vary from business to business, standard terms and conditions for ecommerce sites will include these clauses:
Limitation of Liability
A liability disclaimer is a statement from your business that denies responsibility for damages that your visitors may suffer as a result of using your service.
Pricing and Payment Terms
Under your pricing and payment clause, address online purchase and pricing-related topics, including transaction processes, shipping and delivery terms, and returns and refunds.
Your terms and conditions should also link to your return and refund policy, so users can easily find the details of your returns process. If you decide not to offer refunds, link to your no refund policy or all sales are final policy instead.
A third-party links clause explains the purpose of external links on your site, and that you’re not responsible for the content of sites to which you link.
Intellectual property refers to your business’ trademark and copyrighted content, including images, names, logos, patents, videos, and designs.
This clause lists the materials that belong to your business and outlines rules and restrictions for the use of your materials by outside parties.
Your dispute resolution clause describes how conflicts and controversies related to your terms and conditions are handled.
Disputes can be handled one of three ways, and how your ecommerce site handles disputes will determine what to include in your dispute resolution clause.
- In court — Your terms would need to include information about which courts will handle the case, the court location, and the governing laws that apply.
- Binding arbitration — A mediator or arbitrator will be settling the disputes if you choose binding arbitration. In this case, your dispute resolution clause should describe where the arbitration will take place, the legal regulations that apply, how fees are handled, and what the general process looks like.
- Informal negotiations — You may choose to solve disputes through direct negotiations with customers before proceeding to arbitration. Include information on how long negotiations will take, and how the process will work.
If your ecommerce website allows users to submit content such as reviews, ratings, or comments, you need to include a clause detailing the do’s and don’ts of contributions.
You should also explain who will be able to control and access the user-generated content on your site.
4. Ecommerce Terms and Conditions Examples
Let’s look through some examples of ecommerce terms and conditions from popular online stores to see how these clauses can be applied to your own website.
American Eagle Outfitters: Clothing Company Terms and Conditions
Like the example terms and conditions above, it’s a good idea to lay out your business’ rights when it comes to:
- changing prices
- updating product information
- suspending promotions
- cancelling orders
American Eagle Outfitters also offers a good example of an intellectual property clause specific to ecommerce stores.
As they produce their own brand-related designs and content, American Eagle includes an intellectual property clause to prevent others from improperly using their original materials.
If your business produces original materials that you want to protect, you can follow this example by listing the items that you own, and then describe the circumstances under which other parties are and aren’t allowed to use them.
Target: Standard Terms and Conditions for Online Stores
A good example of standard terms for online stores comes from Target’s terms and conditions. They cover a range of topics, including user accounts and transactions, terms for Target’s services, and what other legal policies Target offers.
As with most standard ecommerce terms and conditions, they include a limitation of liability clause and a warranty disclaimer. Both are important in preventing Target and their employees from being held accountable for damages, injuries, or losses from using their website.
Your business should include both a liability disclaimer and a warranty disclaimer to maximize legal protection, whether they are presented as separate clauses like in the example, or combined under one clause.
Walmart: Terms for User Submissions
If your online store, like Walmart, allows user feedback, you need to include a user submission clause to outline the rules and consequences of submitting content.
User feedback can be valuable for online businesses, so include a user submission clause to ensure contributors are aware of the rules and who has rights to their content.
Best Buy: Dispute Resolution for Online Stores
Terms and conditions are a proactive measure to avoid legal disputes. However, in the event legal disputes do occur, it’s important to have a clear dispute resolution clause, so conflicts can be resolved quickly.
For example, Best Buy’s terms and conditions explain that disputes will be resolved through arbitration by default. They go on to explain the terms of the arbitration, applicable laws, and related fees.
To ensure your business is prepared to handle potential conflicts quickly and inexpensively, include a dispute resolution clause.
5. Ecommerce Terms and Conditions Template [Free]
Terms and conditions are a necessary part of running a successful ecommerce site. Create an ecommerce terms and conditions by customizing our free terms and conditions template, which can be downloaded in PDF or Word document format below:
Use this template to create terms and conditions for your:
- Online store
- Ecommerce website
- Marketplace shop
- Online clothing store
- Dropshipping business
6. Create Your Ecommerce Terms and Conditions
Terms and conditions are important for your online store in order to minimize liabilities, protect intellectual properties, and shield your business against legal disputes.
To create your ecommerce terms and conditions, download our template above and customize the sections according to your business needs. Alternatively, you can use our free terms and conditions generator to create custom terms for your online store in minutes.
Without comprehensive terms and conditions, your business may be at risk. Download or generate your terms and conditions now, to save you the trouble later.
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