💡 Key insights
- “Terms of Use” typically describe the rules for accessing and using a website, app or online platform such as acceptable behaviour, user obligations, and IP protection.
- “Terms and Conditions” usually govern the broader commercial or contractual relationship between a business and its customers, including payment terms, delivery, refunds, liability limits, and warranties.
- Legally there is little difference between Terms of Use, Terms and Conditions, and even Terms of Service; what matters is the content of the document and whether it is properly presented and accepted.
- For many businesses a single document can combine access rules and commercial terms; the appropriate name depends on business type and customer interaction but consistent use of the chosen title matters more than the label itself.
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.
