Thursday, 24 October 2019

Terms and Conditions and Terms of Use – What’s the Difference?

Written by Kyle McIndoe

Reading Time: 2 minutes

It’s likely you’ve encountered numerous legal documents throughout your career. Two prominent documents that you’ve read include a Terms and Conditions and a Terms of Use. Below, we break down the difference between these, and how it may affect you.

The difference

In short, there is no real difference between the two.

Each are a set of rules that users must agree to in order to use or access the service/products that you may offer. Often, this appears in the form of a disclaimer to limit liability. The only prominent difference that may be of note:

  • Terms and Conditions: may be a general disclaimer to limit liability.
  • Terms of Use: may apply specifically to the use of goods or services.

Often, the terms and conditions may contain the terms of use.

Which kind of businesses require terms?

Under Australian Consumer Law, you are legally required to have a terms of use or terms and conditions on your website. This is particularly important if you run an online business.

What elements should be included in a terms document?

A business should include the following elements in their terms document:

  • Definition of misuse
  • Privacy policy
  • Payment details for products or services available
  • Limiting liability

Furthermore, users require notification if you update terms. They must accept these new terms to continue dealings with your business.

Why would one of these documents be useful?

Apart from abiding with Australian Consumer Law, these documents are actually designed to protect your business. Without one of the terms document, your business is vulnerable in the following areas.

Payment

A terms of use or terms and conditions document may outline penalties for failure to pay on time. Furthermore, it may structure how payment is made, and under what conditions a refund may be issued.

Intellectual property

The intellectual property owned by your business will be protected through the terms and conditions. Thus, by outlining the copyrighted material, you may ensure that others cannot steal the business’ product.

Breach of Terms and Conditions/ of Use

The purpose behind these two documents is to outline what others may do in relation to your business. Therefore, if any of these are breached, you have the right to take legal action. It is irrelevant whether the person has read your terms: they simply need to exist and be available to read.

Final thoughts

In short, there is very little difference between a Terms and Conditions and Terms of Use document. However, the fundamental aspect to understand is that at least one of these documents is critical for your business. For further enquiries, a privacy lawyer may be able to assist.

Don’t know where to start? Contact us on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest lawyer marketplace.

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