Terms and Conditions vs. Privacy Policy: What’s the Difference?

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Many startups know they need a Terms and Conditions and a Privacy Policy. But many get stuck with the in formation covered in each – and how to sort it all out. This post will go over the basics of what’s in a Terms and Conditions and Privacy Policy, and how to make sure that each one is thorough and appropriately tailored to your business.

When properly drafted, a Terms and Conditions and a Privacy Policy are legally binding contracts between you and your customers. These provisions are designed both to inform the customer of what they’re agreeing to when they use your service, and also to protect you against claims that you didn’t properly disclose how you collect data, bill customers’ credit cards, or any number of other issues.

A Terms and Conditions (also called a “Terms of Use” or “Terms of Service”) lays out the rules of your service: what a customer has to do if they want to use it, and what you may do as part of the service you provide to customers. Common provisions of a Terms and Conditions include:

  • Your billing policies.
  • How a customer may (or may not) use your service.
  • Your copyright policy and how customers can report copyright violations.
  • When and how you might modify your service.
  • Any warranties that you place on your service.
  • What happens in the event of a dispute, including whether it will be decided in arbitration or in court, and where the case will be heard.

 By contrast, a Privacy Policy discloses the types of data that you collect from customers, and how you use that data. Privacy Policies usually include:

  • The types of “personally identifiable information” that you collect from customers. This includes things like names, addresses, email addresses, or anything else that could allow you to pinpoint an individual’s identity. IP addresses may also be classified as personally identifiable information.
  • The types of “non-personally identifiable information” that you collect. This is anything that can’t be used to identify an individual. Examples include the browser they’re using, the pages they visited on your site, or the zip code in which they are located.

While this all sounds simple enough, crafting a Terms and Conditions and Privacy Policy that comply with all applicable laws and protect you from liability is a complex undertaking – and one that’s crucial for the health of your business. It’s important to get it right the first time so you don’t leave yourself exposed to needless lawsuits or customer complaints.

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