Running an online business requires you to have certain legal policies in order to avoid consequences. However, there’s often confusion when it comes to three of the most important legal documents: privacy policies, terms and conditions, and disclaimers.
Let’s break down each of these policies, so you have a clear understanding of what they are, why each is important, and when you need them.
1. What Is a Privacy Policy?
A privacy policy outlines how your website collects, uses, shares, and sells the personal information of your visitors and customers.
Personal information refers to any information that can identify an individual, such as an IP address, name, email address, or phone number.
Do I Need a Privacy Policy?
If your website collects any kind of personal information, a privacy policy is most likely legally required.
If You Operate in the US
For websites and apps that do business in the US, the Federal Trade Commission (FTC) advises companies to post and adhere to privacy policies, or potentially face legal action.
Businesses with users in California need to abide by the California Online Privacy Protection Act (CalOPPA), which has some of the most stringent guidelines on privacy policies in the US. CalOPPA states that any website owner or operator:
…shall conspicuously post its privacy policy on its Web site.
Notably, this law applies to any website with users in California, even if the business itself doesn’t operate within the state.
Similarly, the California Consumer Privacy Act (CCPA) went into effect on January 1, 2020, and outlines strict guidelines for companies with Californian users to prominently display and abide by a privacy policy.
If You Operate in the EU
The European Union’s General Data Protection Regulation (GDPR) has gained global attention since its implementation in 2018. It requires that all EU companies, and any foreign companies that collect personal data from or about EU subjects, have a comprehensive privacy policy.
If You Use Third-Party Service Providers
If your website runs third-party services such as Google Analytics or Google Adwords, these platforms require you to have a privacy policy that details how their services, plugins, or softwares are used.
For example, Google Analytics requires businesses that utilize its services to host a privacy policy, because Google Analytics uses cookies to collect user data.
In the user agreement of Google Analytics, it states:
You must post a Privacy Policy and that Privacy Policy must provide notice of Your use of cookies […] You must disclose the use of Google Analytics, and how it collects and processes data.
If you meet any of the above criteria, having a privacy policy is an essential part to operating a compliant and user-friendly website. If you don’t have one, build one for free using Privacy Tiger’s privacy policy generator.
2. What Are Terms and Conditions?
Whereas privacy policies are implemented to protect the users and comply with international laws and regulations, terms and conditions serve to protect your business from legal trouble.
Terms and conditions, also known as “terms of use” or “terms of service,” set out the rights and responsibilities of people who visit or use your website. Terms often define key concepts, list the scope of acceptable actions when using your site, and explain the limits of your responsibilities, as the website owner.
When Do I Need Terms and Conditions?
Unlike privacy policies, terms and conditions are not legally required in most jurisdictions. However, terms of service are recommended for all businesses, as they form the legal basis for your website’s relationship with its users — similar to a contract.
Furthermore, terms and conditions provide a line of defense, in case legal disputes about your website arise. Courts will take into account the terms and conditions to address the validity of any legal claims against the website, so it’s important to make sure the document is available and robust.
For ecommerce websites, terms and conditions are particularly valuable in outlining acceptable practices and expectations regarding returns, exchanges, refunds, and cancelations.
The Kindle Store’s Terms of Use include a section detailing how returns and subscription cancellations work.
Incorporating a comprehensive terms and conditions page into your website can save you a lot of trouble in the future. Create terms that satisfy your unique needs in minutes using our terms and conditions generator.
3. What Is a Disclaimer?
Disclaimers differ from terms and conditions and privacy policies in that they address specific liabilities. Disclaimer statements are often included in terms and conditions, as well as having their own designated page.
Depending on the kind of business, website, or app you run, there are different types of disclaimers that you may need to address issues such as copyright, warranty, affiliates, and confidentiality — just to name a few.
When Do I Need a Disclaimer?
Similar to terms and conditions, disclaimers are highly recommended for business and website owners because they provide a defense against legal claims.
Here are some common examples of disclaimers and what they protect:
- Copyright disclaimers protect your original content.
- Fair use disclaimers help you avoid copyright infringement claims.
- Warranty disclaimers protect your company from being held responsible for faults and defects.
- Confidentiality disclaimers ensure protection of client data.
- No responsibility disclaimers minimize your business’ liability for damages.
- Affiliate disclaimers ensure your compliance with the Federal Trade Commission.
Here’s an example of an affiliate disclaimer template:
Assess your website’s activities to determine which types of disclaimers you need. If you aren’t sure which disclaimer or disclaimers will best protect your business, use our disclaimer generator to get guided assistance in creating your custom disclaimer page.
4. Summary
As the world of eCommerce and digital operations grows and changes, it’s important for businesses to have comprehensive legal documents to protect themselves and appease their customers. Here’s a summary of the three most important legal documents your website needs:
- Privacy policies inform users how their personal information is collected and processed. They are typically a legal requirement.
- Terms and conditions set out the guidelines for appropriate use of your website. Though not legally required, they’re highly recommended to protect against legal claims and malicious actors on your site.
- Disclaimers are statements addressing your website’s specific liabilities. They protect companies from liability issues and legal claims.
If you operate an online business or website, you likely need one — if not all — of these policies.
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