Terms and conditions best practices for businesses
Terms and conditions contain important information about licensing, quality, refunds, and the use of private information, to name but a few. They effectively frame transactions.
Terms and conditions can benefit consumers and businesses by bringing more clarity and transparency to a transaction. Unfortunately, they can also mean bad news if they are used to hide the real meaning of a marketing message or to bury important details, such as price information.
Here are some best practices to guide you and your business as you develop or review your terms and conditions.
Terms and conditions: best practices
- No surprises:
- Support or clarify other marketing messages. Do not restrict, contradict or negate your main message.
- Make them accessible:
- Ensure they are easy to find, read and understand.
- Write for your customers:
- Provide clear, complete and accurate information. Avoid legal jargon.
- Include all the relevant information:
- Include any information that could influence a customer’s purchasing decision.
- Maintain open lines of communication:
- Inform customers of any changes. Allow them to opt out. Provide contact information in case of inquiries.
- Know you legal obligations:
- Know what constitutes false or misleading representations under the Competition Act. Seek legal advice if necessary.
Ensure information in the terms and conditions supports or clarifies other marketing representations.
Terms and conditions should not restrict, contradict or negate your main messages, nor should they include obligations that go well beyond what consumers would naturally expect.
For example, do not advertise low prices to attract consumers while burying mandatory fees in the terms and conditions. This practice is called drip pricing and it can be misleading to consumers.
Make them accessible:
Ensure terms are not hidden or difficult to read.
Your terms and conditions should be easy to find, even to those who are not yet customers.
They should also be accessible to people with diverse needs.
Write for your customers:
Provide information that is clear, complete and accurate. Use language that can be easily understood. Where possible, stay away from legal jargon or technical terms. Also, avoid generalities and vague or catch-all terms.
Skip the unnecessary information that makes the document long and difficult to understand. Consider highlighting the most important terms using a summary at the beginning of the document.
Include all the relevant information:
Your terms and conditions should include complete and specific information on pricing as well as all information on accepted payment methods, recurring payments and key dates, among other things.
It should be clear to your customers what they will have to pay, when and how. Include information about contract duration and termination. Also include information related to automatic renewal, if applicable.
Explain your businesses’ refund and return policies and the circumstances under which the terms or conditions of an existing contract may change.
Explain what information is collected from customers and how you will be using and destroying it.
Include all other information that could influence a customer’s purchasing decision.
Maintain open lines of communication:
Provide contact information in case of inquiries.
If you change your terms and conditions, be sure to inform your customers. Allow them to terminate the contract if the changes don’t work for them.
Know your legal obligations:
Terms and conditions that are false or misleading could raise serious concerns under the Competition Act.
We strongly encourage you to contact your provincial or territorial consumer protection agency to get information on consumer protection laws in your region. Also, take some time to review your obligations under the Personal Information Protection and Electronic Documents Act.
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