Startup Terms and Conditions

What are startup terms and conditions?

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.

Why do your startup terms and conditions need to be tailored?

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.

1. Consider your product or service offering

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.  

2. Payment

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.  

3. Disclaimers regarding your website

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. 

4. Relying on any third party websites

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.

5. Intellectual property

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. 

6. Limiting liability

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.  

7. Dispute resolution

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.