Do you ever wonder why the heck you have a terms and conditions page on your website? Do you know what to include in your terms and conditions? Well, let’s chat about that today. I think it’s so important when it comes to the legal part of your business to know why you need to do certain things and not just blindly doing it because someone said so.
Terms and conditions (or Terms of Service) is an agreement that you put on your website that your visitors know how to behave when they are visiting your site. By setting out these expectations, it is easier to defend your right as the owner not allowing them on your website. Expectations are so much easier if you have a list telling someone what to do. If a visitor does violate your terms and service, you can ban them from your website or even sue them if it’s detrimental. Now that you know what terms and conditions are for, let’s get into what to include in your terms and conditions.
Refund policy
If you sell services or goods, then you need to have a refund policy. Your refund policy needs to be consistent across the board. If your refund policy isn’t consistent, then any chargeback will likely err on the side of the purchaser. Do you want to lose thousand dollar chargebacks? I didn’t think so. By having a refund policy, the purchaser agrees to how you handle refunds, and it’s harder to argue against it. Also, I recommend that you add refund policies to the pages of your products/services. Your refund policy should include the following:
The numbers of days a customer has to return a product
What kind of refund you will give to the customer after they return an item
Who will pay for the return? If you sell digital products, whether you accept refunds, and if so, in what cases.
Intellectual property
Not sure what intellectual property is? Intellectual property is a work or invention that is the result of creativity. Intellectual property includes copyrights, trademarks, patents, and trade secrets. The content you produce on your website is copyrighted material. The name of your website and any courses you create are trademarks. The ultimate protection you get is by registering your intellectual property with the right federal agency. By including how people can use your intellectual property, it will keep visitors clear about whether or not they can share your content. Some people don’t want to share any of their blog content, but there are other websites like BuzzFeed who encourage their visitors to share.
Also, if you register your trademarks, you must defend them, or you’ll dilute your brand and will no longer have the same type of protection. If you aren’t protecting your intellectual property, then it’s hard for people to distinguish you from the millions out there. So if someone violates your terms regarding your intellectual property, you should include the consequences, such as deactivating their account or sue them for damages.
Limitation of liability
A limitation of liability clause limits the amount and types of damages one party can recover from the other party. You can’t put a financial cap on death or personal injury arising out of negligence or fraud or fraudulent misrepresentation. You must follow the state’s laws, and the limitation must be reasonable, clear, and conspicuous. If your limitation is confusing or contradictory, the court will construe it in favor of the client/customer.
Termination
Because your website is yours, you can stop people from coming to it, if they don’t abide by your terms and conditions. When you have a termination clause, you can tell your visitors the expectations you have from them when they visit your site. If a visitor can’t follow this, then you are allowed to terminate use. Termination is especially useful for those who have memberships and subscriptions. Most termination clauses contain two standard points:
1. If you violate the terms and conditions, the owner can revoke access;
And 2. The business is allowed to terminate for any reason at the discretion of the business.
Some things that businesses include for grounds for termination are stealing your intellectual property, making disparaging comments, and not paying the fee if it’s a membership or subscription service.
Incorporate your privacy policy
By incorporating your privacy policy by reference, your visitor agrees to follow your terms and conditions AND privacy policy. It’s a 2 for 1, and who doesn’t love that?
Example: Our Privacy Policy incorporated by reference into these Terms and Conditions.
Bonus: Include a clickwrap so that your visitor has to expressly agree to your terms. I’m still trying to figure out how to add a clickwrap pop up without a ton of pop-ups on my page. But in short, a clickwrap is a pop up that says, “I agree.” It is a legally secure and easy way of creating binding agreements with your visitors online. There are a few legal cases that discuss clickwrap.
Now that you know, are you going to include these sections in your terms and conditions? Do you have terms and conditions on your website at all? If you don’t, you can grab it from my contract template shop. It takes about 15-20 minutes to fill in, and costs 1/2 the price of hiring an attorney.
When you work with a client, the last step in most service-based business is the almighty testimonial. In this blog post, I discuss the testimonial guidelines you should follow. Even so, this testimonial could cause a client to sue you. A person usually writes a testimonial as a recommendation, and in turn other people want to hire you. However, there are legal steps you need to take before putting testimonials on your website or on social media.
Most people never think of these steps because no one talks about it, so you have no idea. Luckily, you have me to tell you what you need. These 2 testimonial guidelines cover you if:
1. Someone says they didn’t give you permission to use their testimonial or
2. That they didn’t get the results that were in one of your testimonials.
Put a release in your client contract and your terms and conditions.
If you are gathering reviews or testimonials from clients, you need one thing in your contract to cover your assets. Stay tuned to find out what it is.
Hey everyone, my name is Michelle Murphy, the owner of Wilson Murphy Law where I partner with creative entrepreneurs to protect their businesses through trademarks, contracts, copyrights and forming their business entity.
So as business owners we want social proof on our websites. But in your contract you need to include a release. In my contracts, I name them a “Release to Create Marketing Materials.” If this is not in your contract and you use your clients face, likeness, photo, or name without their permission, Florida can fine you up to $1000. This is due to the fact that we all have the right to privacy. Every states fine is different, but the majority of states have a right to publicity statute so google it to see how much your testimonial can be costing you.
And since we’re on the subject of contracts, make sure you join the waitlist for the free 7 day contract course where you will learn how to create a legally valid contract and what to put in your contract to protect yourself and find more hints that can change your contract drastically.
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Add a testimonial disclaimer to your terms and conditions.
A disclaimer is a statement that usually denies responsibility. A testimonial disclaimer tells your visitors that he or she may not get the same results as a testimonial that is on your website. This is a way to cover your assets, so that a visitor can’t say you guaranteed the same results as the testimonial. A testimonial disclaimer that I write in the terms and conditions/disclaimers for my clients looks something like this:
The testimonials, statements, and opinions presented on ________________________ (website address) are applicable to the individuals who wrote it. Results vary and may not be representative of the experience of others. The testimonials are voluntarily provided and are not paid, nor were they provided with free _____________ (products or services (choose one or both)), or any benefits in exchange for their statements. The testimonials are representative of ____________ (customer or client (choose one)) experiences but the exact results will be unique and individual to each ____________ (customer or client (choose one)).
By using these testimonial guidelines, you are protecting yourself from others blaming you because they did not get the results as your other client.
If you are interested in a DIY contract template that is half the cost of hiring an attorney, visit the WM Law Shop.
I troll Facebook groups HARD. I usually find that contracts for creative businesses are a huge topic. Usually these creative business owners can’t get their clients to pay or they don’t know how to handle a client or independent contractor they no longer want to work with. The first thought that crosses my lawyerly mind is: “Do you have a contract in place?”. The second thought is: “Does your contract address these issues?”. Most creative entrepreneurs only care about the creative part of the business, and throw the legal “junk” on the bottom of the to-do list. All businesses need signed contracts. Although, verbal agreements can be legally binding, they are extremely hard to enforce in court. Today, we’ll be discussing contracts for creative businesses that you need in writing to make sure that your business is protected.
1. Client contract
If you are always booked and busy with clients, your client agreement needs to be airtight. Client agreements protect you and your business from clients who don’t want to pay, unruly clients, your intellectual property, and so much more. Although there are many generic contracts out there, everyone’s business isn’t the same so make sure that you are making the appropriate changes to protect yourself. And when you make changes in any client services, make sure that you update your agreement to reflect the changes.
2. Privacy Policy
Ah, the privacy policy. Do you need it? Do you not? First of all, you need it. Don’t know what it is? Well, you’re in luck because I am going to tell you. The privacy policy addresses all of the ways a party gathers, uses, discloses, and manages your site visitors personal information like their emails, addresses, or names. Privacy policies are especially important to creative businesses because they usually include A LOT of emailing. Don’t forget California Business and Professions Code, Internet Privacy Requirements (CalOPPA) requires that websites collecting Personally Identifiable Information (PII) from California residents must conspicuously post their privacy policy. So putting it in the footer is not enough.
3. Terms and conditions
Terms and conditions aren’t required, but if you want people using your digital courses and e-books any old way or want people using your content how they please, then don’t put terms and conditions on your website. But if either of those scenarios starts giving you anxiety, then put one on your site. Terms and conditions let people know how they should behave on your website. It is laying out the policies and rules they need to abide by when cruising through your site. Terms and conditions may not seem like a contract, but it is because if they don’t abide by your rules, you can kick them off or even sue them. How? I’m not sure how you can ban them from your website, but I’m sure there is some software or a WordPress plugin that lets you get the job done. Just like a privacy policy, be sure that you are addressing the issues that relate to your website and your industry. A policy like Google’s won’t help your copywriting or skincare business.
Bonus contract: Independent contractor agreement
Eventually your business is going to grow and you are going to need to outsource tasks. Once your business gets to this level, you’ll need an independent contractor agreement. Some terms that should be in your agreement?
Payment terms
The parties to the contract
A term stating that the worker is an independent contractor
An intellectual property ownership/work for hire clause
These are just some of the terms. By the way, each state has different laws about the difference between an employee and an independent contractor. Having someone sign an independent contractor agreement doesn’t necessarily mean they are an independent contractor. But hey, that’s a different post for a different day.
If you need a contract for your creative business, check out WM Law Shop for various types of contracts.
If you want a custom contract for your business, fill out the form below to work with Wilson Murphy Law.
A definitive guide on how to write a contract and what needs to be included in a valid contract
Can we all agree contracts are difficult to understand? I think we can also agree it’s even harder to understand how to write a contract that’s actually going to protect you and your business.
Well today we’re reviewing not only how to write a contract, but understanding what constitutes a valid contract.
But first and foremost, ALWAYS have awritten contract. Legal agreements are one of the most important aspects of your business. Creating and reading contracts is a very important duty when you are a business owner. The more your business grows, you will be expanding your team and working with other companies or businesses. This means more contracts (e.g. employee contracts and collaboration agreements) to review. One bad contract can cause your business to come crumbling down.
And with that, the first thing to ask is what is a contract?
What is a contract?
A contract is a legally binging agreement where two parties agree to perform something for something (quid pro quo). When two parties enter into a contract, they have duties and responsibilities to the other party to do what was agreed upon.
What makes a contract valid?
There are three elements that form a contract: offer, acceptance, and consideration (payment).
Offer: If you create my website, I’ll pay you $1200.
Acceptance: “I accept this offer” or a downpayment of $50 implies acceptance of the contract.
Payment: You’ve paid $50 as a deposit or the full contract price of $1200 for the website.
However, a valid agreement can be void if the person signing is under age, under duress, or not of sound mind.
Standard clauses to include in your contract
1. The first standard contract clause you need is the parties involved.
Your agreement should identify both parties that are agreeing to enter the contract. This clause is one of the top priorities when you are creating your contract. The parties involved clause states the person who is legally bound to the contract, and who is obligated to perform. Depending on the other clauses of the contract, if either party breaches, then the party can sue the person who did not perform their obligation.
Example: This agreement is made on [insert date] (“Effective date”) between [insert Party 1] (“Buyer”) and [ insert Party 2](“Seller”).
2. Include what services you are providing or goods you’re selling.
Include this standard clause in your contract to describe the reason that you are entering the agreement. Be sure that you are specific about what you are selling and when you are selling it. If you are a service-based company, you will describe what services you are performing. Also add when you will perform these services. If you sell goods, describe the goods you are selling.
Example: [Insert company name] will provide business coaching to Client for 1 hour daily for the next 30 days. [Insert company name] and Client will discuss mindset, building content, marketing strategies, business system workflows, sales tactics, and email list building. Services will not include tax and legal discussions.
Example: Seller agrees to sell, transfer, and deliver to Buyer fifteen green planners for forty dollars each. Seller agrees to deliver the green planners on or before October 31, 2019.
3. How long does the contract last?
Does your agreement last until performance has ended or does it last a year. These are terms that you’ll need to be specific about as to not cause confusion amongst parties. If one party believes that the contract was supposed to last for 3 months and the other party was under the belief that it was supposed to last a year, then that’s an issue. And that issue could cause a lawsuit. Being clear at the beginning of your working relationship will avoid any sort of confusion.
4. How much are you getting paid?
This is a clause that should ALWAYS be in your contract because you want to get the service/good you are paying for. And most importantly, you want the other party to pay you for the service/good you are giving! Consideration is what each party is receiving in exchange for the performance of the service or delivery of the goods. Make sure that the consideration clause includes price, quantity, quality and time of performance.
Example: In consideration of One thousand five hundred dollars, Photographer agrees to perform the wedding photography on April 24, 2018 at the New York City Library.”
Example: Consultant agrees to provide services for one year to Client in exchange for a $500 monthly payment beginning January 1, 2018, and on the 1st of every month ending on December 1, 2018.
5. You need a Governing Law/Choice of Law clause.
Governing law is the state where the rules and laws apply to interpret the agreement. This will usually be in your home state. But if you have businesses in multiple states, use the state that has the most favorable laws.
Example: This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of [State].
Example: All of the rights and obligations of [company/party] and [other party] arising under or related to this agreement shall be governed by the laws of the State of [state].
6. Last but not least, include an Entire Agreement clause.
This clause states that the contract is complete and any prior contract is invalid. Place this at the end of your agreement. If there are multiple contracts or attachments part of the same transaction, include these documents in this clause.
Example: This Agreement represents the entire understanding between the parties and any prior understanding or representation of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement.
Example: I have read this agreement in its entirety and I agree to and understand the terms and conditions set forth herein. Any prior understanding, representation, terms, or oral agreement of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement. This agreement may not be amended or modified in any way without the prior written consent of [Party 1] and [Party 2].
Final thoughts on how to write a contract for your business
Now you have the framework on how to write a contract. Incorporating these standard clauses in your contract will provide protection to you and your business. Although the above clauses are important, depending on your industry, there are other clauses that you need to include in your contracts. Wilson Murphy Law drafts various contracts for the countless needs of your small business. If you need a specific contract or any other legal services, Wilson Murphy Law is at your fingertips.
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