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Essential clauses in the Terms and Conditions Agreement

Ashish M. Shaji

| Updated: Jun 17, 2021 | Category: General Agreement

Terms and Conditions Agreement

There is no compulsion of possessing a terms and conditions agreement, but there are many reasons to have one. This agreement helps to safeguard business by enacting rules that anyone using your online platform should agree to. It creates a contract between end-user and your business. We will look at some of the essential clauses of this agreement in this article.

Terms and Conditions Agreement- Overview

It is a set of rules and regulations written between parties. The user should agree to it in order to use the website and services of the company.  A company can tailor the rules and regulations as per their services.

Benefits of having Terms and Conditions Agreement

One of the advantages of this agreement is the ability to pose the right set of obligations for your customers and your business. One can create transparent payment norms and also inform customers what is classified as acceptable and unacceptable use of your site and also explain what happens in case of non-compliance with the terms of the agreement.

Further, you can leverage the agreement to safeguard the intellectual property, guard your liability and include any legally required disclosures.

In the next segment, we will look at the essential clauses that you should enclose in your T&C agreement.

Terms and Conditions Agreement: Essential Clauses

There are certain essential clauses that must be included in this agreement. They are as follows:

  • Scope of Services

The best way to draft a T&C agreement is by including the information about the products or services you will offer. For instance- Facebook uses such clauses to explain to customers about the service that it provides and what its mission is.

  • Changes to the Agreement

If there are some changes added to your business or in case there is an amendment in law, you may have to update the same on the T&C Agreement. The agreement should contain a clause that provides such right to make such changes and allow customers to know how these changes will be communicated.

  • Prices & Payment Clause

This is another essential clause that tells your customers about:

Prices & Payment Clause
  1. What happens if a payment is not obtained;
  2. When is the payment due;
  3. Methods of payment accepted;
  4. Taxes[1] etc.

This will help in preventing misunderstanding and future payment disputes.

  • Limitation of Liability Clause

This is crucial regardless of the size of the business, as you can leverage it to protect the number of damages your business is liable for.

You may also project this clause to communicate that your business is not accountable for any invalid information on your website etc.

  • Governing law clause

This short clause tells where your business is based and means which nations’ law governs the agreement.

  • Acceptable use clause

This clause tells the end-users to use your app lawfully. In order to ensure that users understand what conduct is not valid, this clause should provide for what behaviour is deemed inappropriate. It should also tell the end users what happens if they breach the terms of the clause.

  • User generated content

If your site or app is open for user generated content like articles, blogs, or tweets, then you should enclose a clause for it in the agreement.

In order to ensure maximum protection for your business, you should include a clause providing what user generated content is accepted on the website.

For instance– You should look to clarify that the content the user uploads should be free from any abusive or derogatory elements. The agreement ensures clarity about the conformity of the user generated content with the company’s content guidelines. It should further explain that the user would be liable for what they are uploading.

  • Intellectual property clause

The terms and conditions agreement should let the customers know what intellectual property you own and what they may and may not do. It will help in preventing unintentional violations.

  • Termination clause

This clause gives you the power to revoke the end users’ account or forbid users from your site and impose limitations. You can invoke this clause if users use your app or website inappropriately.

  • Contact clause

This should tell users how they can communicate with your company. If possible, provide your e-mail address etc.

While every company may have different requirements and practices when it comes to including clauses, you should enclose these clauses as a starting point to create your own Terms and conditions agreement.

Conclusion

A terms and conditions agreement lays down the information pertaining to what is required of customers and what they can expect from the company. It sets up a contract between the two. Ideally, this agreement should contain clauses about the scope of your company’s services, payment terms, IP, acceptable use etc. It is highly recommended to draft your T&C agreement. 

Read our Article: Limitation of Liability clause is important in Contracts

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Ashish M. Shaji

Ashish M. Shaji has done his graduation in law (BA. LLB) from CCS University. He has keen interests in doing extensive research and writing on legal subjects especially on criminal and corporate law. He is a creative thinker and has a great interest in exploring legal subjects.

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