Key Takeaways

  • A small business terms and conditions template should clearly set out services, payments, warranties, liability limits, refunds, delivery timelines, privacy rules, breach remedies, termination terms, and governing law.
  • Expanding terms to cover intellectual property rights, user responsibilities, dispute resolution, force majeure, amendments, and contact information strengthens enforceability and reduces risk.
  • Including dispute resolution options like arbitration or mediation can save costs compared to litigation.
  • A well-structured policy improves trust, clarifies obligations, and helps small businesses avoid misunderstandings with customers.
  • Small businesses should customize templates to reflect their industry, customer base, and jurisdiction.

Example terms and conditions of business is a generic template of business terms and conditions that a business owner can adopt, customize, and use as the terms and conditions of their business. Some of the following may not be applicable to your business, but they can be a source of ideas as you develop the terms and conditions of your business.

Clearly Describe Your Services and Products

All businesses should include in their terms and conditions a description of the services and products they offer their customers. The smaller the business, the greater the need for a more specific description of its services and products. In addition to providing clarity, specific descriptions help to avoid issues arising from customers expecting more than your business offers for a given fee.

Terms of Payment

Your terms of payment should include prices, late payment fees or interest, returned check surcharges, and so on.

Intellectual Property Rights

Clearly outline who owns the intellectual property connected to your products or services. For service-based businesses, specify whether clients receive full ownership of deliverables or only a license to use them. If you create digital products, make it clear whether reproduction, resale, or modification is prohibited.

Guarantees or Warranties

A guarantee or warranty reassures your customers of the quality of your services or products. Guarantees and warranties should also be time-specific so that you won't have to deal with a refund request five years after rendering a service or delivering a product. Settle for a realistic and suitable timeline for your business, such as 30 days or 12 months.

Limitations due to Liability

It is not a safe practice to offer guarantees and warranties in a high-risk industry. Instead, businesses should disclaim warranties to minimize liability.

User Responsibilities

State what you expect from customers or clients when using your services or products. For example, software providers may require users to keep login credentials secure and refrain from unlawful use. Service businesses may require customers to provide accurate information or ensure access to premises when work is performed.

Refund Policy

Retail businesses typically have different refund policies. A refund policy is usually given its own webpage on e-commerce sites. Service contracts sometimes don't include refund options. Wherever the refund policy of your business occurs, make sure it's consistent. Otherwise, courts will rule against you in the event of a lawsuit.

Dispute Resolution

Explain how disputes will be resolved if problems arise. Options include:

  • Negotiation – attempt to settle directly with the customer.
  • Mediation or arbitration – a neutral third party helps resolve the issue without court involvement.
  • Jurisdiction – define the courts or arbitration body with authority over disputes.

Including these clauses helps avoid lengthy litigation and keeps disputes cost-effective.

Timelines for Delivery

Delivery timelines depend on the kind of service or products you sell. There are deadlines for services and scheduled delivery dates for products. Agree on a deadline or delivery date only if you're sure you can hold up your end of the bargain.

Force Majeure

Consider including a “force majeure” clause that protects your business when events outside your control prevent delivery—such as natural disasters, strikes, or global supply chain disruptions. This protects small businesses from liability when unforeseen events make fulfillment impossible.

Privacy Policy

If your business involves personally identifiable information, it needs a privacy policy as much as it needs terms and conditions. It's also good practice to make reference to confidentiality or privacy in the terms and conditions. However, nothing can take the place of a full-blown privacy policy in a business that involves sensitive information.

Solutions for a Breach

A breach of agreement can come in various forms including but not limited to the following:

  • Poor-quality products and services
  • Failure to pay for satisfactory goods or services
  • Making a refund request after the expiry of valid timelines
  • Delivery of damaged goods

Refund procedures are used to solve the problem of rendering substandard services or delivering poor-quality products. Another remedy is to indicate preferred methods of dispute resolution. It's best for small businesses to avoid expensive lawsuits and use optional dispute resolution methods.

For instance, the terms and conditions of some businesses specify that all disputes are to be resolved by arbitration and that customers are required to waive their rights to a court trial. Sometimes even the venue and applicable rules of the arbitration process are specified. Specifying arbitration or mediation as a means of dispute resolution can save your business unnecessary legal fees.

Agreement Termination

Agreement termination clauses define how the business relationship that is stated in the terms and conditions should come to a close. They typically state that termination takes place by unanimous agreement or on the condition that a party notifies other parties of their intent to terminate 30 days before the effective date.

Some businesses describe their exact agreement termination process. Agreement termination clauses prepare business owners for contract terminations. That way, businesses aren't taken by surprise and are prepared to replace lost deals with new ones.

Amendments to Terms

State how and when you may update your terms and conditions. For instance, businesses may reserve the right to make changes with prior notice to customers. This ensures flexibility while still informing clients of updates.

Governing Laws

Adding governing laws to your company's terms and conditions is a good practice, especially if your services or products are not limited by location. For instance, if you deal with goods that are shipped across the country or overseas, you should indicate that all disputes will be settled close to home by limiting the jurisdictions where customer complaints can be made.

Typically, a footnote in the section for dispute resolution or a miscellaneous section can serve this purpose. It is best to choose the home jurisdiction of your business for dispute resolution in order to save costs in case of a dispute.

Contact Information

Provide a section where customers can reach you with questions about your terms. List a business address, email, or other official contact channel. This not only complies with consumer protection standards but also builds customer trust.

Frequently Asked Questions

  1. Do small businesses legally need terms and conditions?
    No, they are not legally required, but they are highly recommended to protect your business and clarify customer expectations.
  2. Can I copy a terms and conditions template I find online?
    You can use a template as a starting point, but always customize it to fit your business, industry, and governing law.
  3. What happens if my business has no refund policy?
    Consumer protection laws may require you to provide refunds in certain situations, even without a stated policy.
  4. Should my terms include intellectual property rights?
    Yes. Including IP rights prevents unauthorized copying, use, or resale of your business’s products or services.
  5. How often should I update my terms and conditions?
    Review them annually or whenever your business changes operations, introduces new products, or faces new regulatory requirements.

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