Terms and conditions are the vital details that businesses put in place to ensure that they protect their rights. However, you should also ensure that they are legal, enforceable, and serve their intended purpose. Otherwise, you leave your company exposed to legal liabilities or unwanted consequences.

Rather than leave your contracts to best guesses, check out the information below to learn more about terms and conditions.

What are Terms and Conditions?

Terms and conditions are part of a that ensure parties understand their contractual rights and obligations. Parties draft them into a legal contract, also called a legal agreement, in accordance with local, state, and federal contract laws. They set important boundaries that all contract principals must uphold.

Purpose of Terms and Conditions

The purpose of terms and conditions is to provide a set of instructions for all parties of a contract. They also offer guidance to courts regarding the intent and purpose of the transaction at the time it was created.

Elements of terms and conditions may include:

• Rights
• Obligations
• Duties
• Roles
• Responsibilities
• Consideration
• Contact info
• Signature lines
• Handling disputes
• Important dates
• Deliverables
• Payment terms
• Limitations

Terms and conditions exist to inform people of their rights when engaging in a business transaction. They carry legal implications of which both parties should be aware. Carefully review all contracts before signing them since many do not let you cancel them without penalty before fulfilling your obligations.

Terms and Conditions vs. Terms of Service

Terms and conditions and terms of service are different. Using them interchangeably will result in legal errors or miscommunications. Avoid this situation by reviewing their definitions separately.

Below, check out the differences between terms and conditions vs. terms of service.