Startup terms and conditions is a legal document that governs how your customers purchase your products or use your services, the conditions upon which they do so and the commercial terms that govern the arrangement.
Terms and conditions should be in the “ABC” of starting a business. Having your startup terms and conditions tailored for what you are doing and not just grabbing a precedent from somewhere else is critical to make sure the business is protected.
So many startup businesses forget to make sure that their terms and conditions cover them for what they are doing and provide proper legal protection for the business right from the outset.
Having this agreement very clear between your business and your customers that set out your business’ and your customers’ rights and obligations to make sure everyone’s on the same page from the get-go.
Startup businesses are typically unique in nature and require tailored and considered Terms and Conditions that are legally drafted to ensure your business is protected properly. What’s the point in having them if they don’t provide proper legal protection? This is where our team of startup lawyers can help.
It’s important to have Terms and Conditions in place before you launch your startup to ensure your business is protected from the outset.
Small businesses constantly think that somehow they are a protected species, but they aren’t! The consumer/customer/client is the protected species not you. A Court or a Tribunal views your business like a big bad business and views consumers like any other protected species. E.g. tenants, minors, employees. Etc.
Think of your business like your castle. The outer moat is your terms and conditions, privacy policies, waivers and disclaimers to protect the castle. The inner moat is your business insurance. The castle walls is your legal structure.
Startups generally offer new and innovative services or products, possibly something unique on the market or at least delivered in a different way.
You should consider what makes your product or service unique and ensure that this is accounted for in your terms and conditions by providing a description of your products and services and including any additional terms specific to those products and services.
It’s important your customers are clear on your prices and fees, what payment methods are available to pay for your products and services and when payment is due.
If you require any deposits, you’d include this as well.
A significant number of startups are partly or completely online businesses. While it’s highly convenient to offer products and services online, you need to be mindful to include disclaimers and limiting liability clauses.
These state that while you endeavour to conduct proper maintenance and maintain the security of your website, using reasonable means, your business is not liable for any loss of data, errors, defects, omissions, delays in operation or transmission, hacking, downtime, hosting failure, or any other failure of performance of your website, servers or any software that your business uses or provides.
If your website relies on various third-party websites you need to state this in your start up terms and conditions and importantly emphasise that any links to other websites on your website, which are not operated by your business are not controlled by your business and you accept no responsibility for them or for any loss or damage that may arise from a customer’s use of them.
Those sites would have separate terms and conditions governing your customers use of those sites.
Your terms and conditions should state that the intellectual property in your products, services and website are your business’ intellectual property and that your customers must not copy, reproduce or exploit your IP in any way.
It should also state that your business owns unregistered and registered (if this is the case) trade marks and that your customers must not use your trade marks in any way, including in connection with any product or service that does not belong to your business, in any manner that is likely to cause confusion with customers, or in any manner that disparages your business.
Your terms and conditions should also include a clause that seeks to limit and exclude your liability where possible and cap your liability to the cost of your products and services.
It should also state that, to the extent permitted under the ACL, your business is not liable for any loss or damage arising out of or related to your services.
You should also include that in no event will you be liable, in contract, tort (including negligence) or otherwise, for any direct, indirect, special or consequential loss, damages or reliance in connection with your services.
Including a dispute resolution clause in your start up terms and conditions is highly beneficial as it establishes a process for resolving disputes that the parties are required to follow, often prevents customers from resorting to disruptive and costly Court proceedings.
This establishes an agreed process that must be followed before any proceedings may be filed.
This is advantageous as it also saves your business significant costs associated with defending Court proceedings, which can be very time-consuming and costly.
You should seriously consider obtaining at least one registered trade mark of your business’ name and logo as an added protection, which also adds value to your business as an asset.
A registered trade mark allows you to stop other businesses providing the same services from trading under your business name and if another business tries to stop you from using your business name you can rely on your rights in your registered trade mark to defend against those attempts.
Most businesses deal with a certain level of risk, and for this reason it’s worthwhile considering a company structure for your business as this provides added protections compared to trading as a sole trader where you are personally liable for the actions and debts of your company. With a company the company’s liabilities remain with the company and your personal assets are protected.
When you have a company structure in place and multiple shareholders, it’s prudent to have a Shareholder’s Agreement in place to establish how the company will be managed and the rights and obligations of the shareholder, among other matters.
If you deal with certain types of personal information, such as health information, tax file numbers and credit reporting information, among others, you’re legally required to have a privacy policy, but even if you don’t handle this type of information, it’s just good business to have a privacy policy.
This provides customers with confidence in your business that you will handle their personal information responsibly and not sell their details to third parties.
During the development stages of your startup you’ll likely be discussing your startup idea with potential investors to raise capital or third parties to assist in further developing the idea, product or service.
It’s highly advisable to protect your unique startup idea by having a confidentiality agreement in place before you disclose confidential information of the business to third parties. For more information please see our article here.
As your startup grows and you decide you need more staff to assist with the growth of the business, you’ll need comprehensive employment agreements in place.
We charge a fixed fee starting from $1,400 + GST, which includes phone calls with you to obtain your detailed instructions, provide you with advice, drafting the document and one round of changes based on your instructions.