Terms & Service

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?

Terms and conditions (also referred to as terms of use or terms of service) are a form of legal agreement outlining rules and restrictions for customers to follow when using your site.

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 spammingusing 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.

For example, Etsy’s terms of use explains in plain language the issues and potential damages that are outside of the company’s responsibility: