Creating Standard Terms and Conditions

Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom.
Also note: This is not legal advice.

Introduction

Creating standard terms and conditions is an essential component of any business. Without them, there is no common understanding between the customer and the company, leaving it exposed to potential disputes, risks and liabilities. The Genie AI team helps people to set up effective agreements that protect their interests - here’s how.

By establishing a framework of agreement, standard terms and conditions help both parties understand their rights and responsibilities. This can help ensure that everyone involved in a transaction is held accountable for their respective obligations. Furthermore, they provide clear protection for a business’ intellectual property rights: its knowledge, inventions or creative works - safeguarding against misuse or exploitation without permission.

Standard terms and conditions also offer an effective way for businesses to limit their liability in the event of something going wrong - protecting their assets from excessive losses should disputes arise down the line. Additionally, they provide clarity: providing straightforward communication between companies and customers so both parties know what to expect from each other - making life easier for everyone involved (and avoiding costly legal fees).

People who need help with creating standard terms and conditions should look no further than Genie AI’s community template library: millions of datapoints have been collated to teach our AI what a market-standard agreement looks like. We offer free access to our templates so that anyone can draft high quality legal documents without having ongoing costs with a lawyer or law firm - streamlining the process while still ensuring legal protections are firmly in place…

At Genie AI, we believe that everyone deserves access to proper contracts which keep them safe in any business relationship - read on below for our step-by-step guidance on how best to create your own standard terms and conditions today!

Definitions (feel free to skip)

Agreement - A contract between two or more parties that sets out the rights, responsibilities, and obligations of all involved.
Terms and Conditions - The legal document that outlines the rules, restrictions, and obligations that all parties must follow in order to remain in compliance with the contract.
Scope - The range of items or activities covered by the agreement.
Duration - The length of time the agreement will remain in effect.
Rights - The privileges and entitlements provided to parties involved in the agreement.
Responsibilities - The duties and obligations that must be fulfilled by each party.
Payment Terms - The terms of payment, including the amount, timeline, and methods of payment.
Termination - The end of the agreement, either due to breach of contract, non-payment, or other material terms.
Severability Clause - A clause in the agreement that states that if any part of the agreement is deemed invalid or unenforceable, the rest of the agreement remains valid.
Dispute Resolution - The process of resolving disagreements or conflicts between two or more parties.
Signature Block - The section of the agreement that includes the names, titles, and signatures of the parties involved.

Contents

• Understand the Purpose of Terms and Conditions
• Define the Scope of the Agreement
• Identify the Parties Involved
• Describe the Services or Products to be Provided
• Outline the Duration of the Agreement
• Outline the Rights and Responsibilities of Each Party
• Describe Each Party’s Right to Receive Services/Products
• Detail Required Performance/Delivery Levels
• Describe Warranties, Guarantees & Liability Limitations
• Set Out Payment Terms
• Specify Payment Amounts
• Set Payment Schedule
• Outline Payment Method
• Describe Late Fees & Penalties
• Provide Conditions for Termination
• Outline Circumstances in Which Agreement Can Be Terminated
• Set Out Responsibilities on Termination
• Clarify the Law Governing the Agreement
• List the Governing State or Country
• Outline Jurisdiction Requirements
• Include a Severability Clause
• Determine Dispute Resolution Options
• Specify Types of Disputes Covered
• Outline Options for Resolving Disputes
• Establish a Third-Party Mediator
• Create a Signature Block
• Set Out Witness Requirements
• Define Authority to Sign
• Determine Whether Digital Signatures are Acceptable
• Have the Agreement Reviewed by a Professional
• Research & Select a Professional
• Provide Professional with Requested Information
• Review Professional’s Feedback & Make Necessary Changes

Get started

Understand the Purpose of Terms and Conditions

• Research applicable laws and regulations for your business
• Consider the purpose of the agreement, such as defining the rights and responsibilities of each party
• Analyze the types of services or products you will provide and the corresponding risks
• Determine the nature of the relationship between parties
• Identify any elements that need to be included in the agreement, such as payment terms and delivery deadlines
• When you have a clear understanding of the purpose of the agreement, you can move on to the next step.

Define the Scope of the Agreement

• Determine what the agreement covers and the scope of the services it will provide
• Review any specific limitations or exclusions and consider how they should be addressed
• Define the geographic scope of the agreement, if applicable
• Consider any additional provisions that should be included in the agreement
• Make sure all aspects of the agreement are legally binding
• Once you have all the details of the agreement laid out, you can move on to the next step.

Identify the Parties Involved

• Determine who is responsible for providing services or goods and who will benefit from them
• Identify the legal name of each party, their contact information, and the jurisdiction in which they are located
• Establish the relationship between the parties and the context of the agreement
• Define the roles and responsibilities of each party
• Verify that each party has the legal ability to enter into the agreement
• When all parties have been identified, contact information is verified, and all roles and responsibilities are established, this step can be checked off the list and you can move on to the next step.

Describe the Services or Products to be Provided

• Clearly identify the services or products that will be provided by the service provider
• Include a detailed description of what is expected from the services or products
• Specify any additional details that are required for the services or products to be provided
• Make sure to include any applicable warranties or guarantees that are offered with the services or products
• Check that all necessary information is included in the descriptions
• Once all the services or products have been accurately described and all the necessary details have been included, the step can be considered complete and you can move on to the next step.

Outline the Duration of the Agreement

• Decide on the duration of the agreement, including start and end date
• Specify whether the agreement is renewable or not
• Include language that states the agreement will terminate if either party breaches a material term
• Include language that outlines the consequences of termination
• Include language that outlines a process for the parties to resolve disputes
• When the agreement is complete, check off this step and move on to the next step, Outline the Rights and Responsibilities of Each Party.

Outline the Rights and Responsibilities of Each Party

• Include a clause for each party’s rights and responsibilities
• Include the general terms, such as 6 month terms, and payment terms
• List any services or products each party is responsible for providing
• Include any warranties or guarantees each party is offering
• Outline any limitations or restrictions on each party
• Specify the responsibilities of each party
• Set out any indemnification provisions

You will know you have successfully completed this step when you have outlined the rights and responsibilities of each party.

Describe Each Party’s Right to Receive Services/Products

• Clearly outline what each party is responsible for delivering or providing (e.g. services, products, warranties, etc.)
• Identify the specific details of each party’s right to receive services or products (e.g. quality, quantity, delivery timeframes)
• Ensure that the terms and conditions clearly state what each party is responsible for providing or delivering, and how those services or products should be delivered
• Check off this step when you have written a clear and concise description of each party’s right to receive services or products in the terms and conditions.

Detail Required Performance/Delivery Levels

• Outline the performance and delivery expectations that the parties must meet
• Define the acceptable performance level and delivery time frames
• Describe any additional requirements and/or criteria that must be met
• Specify any additional penalty clauses that may be implemented in case of non-compliance
• Include any additional terms and conditions related to the performance/delivery of services/products
• Finalize the details of performance/delivery levels and ensure that both parties agree

You can check this off your list when you have finalized the details of the performance and delivery levels in the contract and the both parties have agreed to the terms.

Describe Warranties, Guarantees & Liability Limitations

• Clarify any warranties, guarantees, and liability limitations that apply to the products/services you are providing
• Describe any applicable warranties, guarantees, and limitations of liability in your Standard Terms and Conditions
• Make sure to include any disclaimers and exclusions that apply
• Check with a lawyer if you’re not sure what disclaimers and exclusions you need to include
• Once you are satisfied that you have accurately described any warranties, guarantees and liability limitations, you can check this step off your list and move on to the next step.

Set Out Payment Terms

• Specify the payment type (e.g. cash, credit card, cheque, etc.)
• List the accepted payment methods
• List the payment periods (e.g. monthly, quarterly, annually)
• Set out the payment schedule
• State the consequences for late payments
• Specify any additional fees
• Determine the currency of payment

Once all the payment terms are specified, this step can be checked off the list and the next step can be tackled.

Specify Payment Amounts

• Outline the payment amounts for goods and services provided by the business
• Decide on the payment method for customers, such as cash, credit card, check, or direct deposit
• Specify the payment amounts for each item, and whether these are fixed or variable amounts
• Include a payment amount for any applicable taxes
• Specify any additional fees or charges that the customer may incur in association with the goods or services

Once the payment amounts have been specified, the business can move on to the next step of setting up a payment schedule.

Set Payment Schedule

• Establish when payments will be due (e.g. 30 days after receipt of invoice, or within 7 days of invoice date).
• Decide if there will be late payment fees associated with invoices not paid on time (e.g. 5% of invoice total).
• Determine if there are any other conditions around payments (e.g. discounts for early payment).
• Review the terms and conditions and make sure the payment schedule and any associated conditions are clearly outlined.
• You can check this off your list when all payment details have been finalized and included in the terms and conditions.

Outline Payment Method

• Decide on the payment method you will accept (e.g. cash, check, credit card, PayPal, etc.)
• Make sure to include any additional fees or taxes for certain payment methods
• Include payment instructions in the document (e.g. when and where to send the payment, if a specific account number is needed, etc.)
• Once you have outlined the payment methods, you can check this step off your list and move on to the next step.

Describe Late Fees & Penalties

• Establish a policy regarding late payments
• Specify when late payments are considered to be overdue
• Establish an interest rate on overdue payments
• Outline how the customer will be notified of late payments
• Describe any additional penalties (e.g. late fees or other charges) that may be applicable
• Make sure to include any applicable legal terms and conditions

You can check this step off your list when you have outlined all of the late payment fees and penalties in your Standard Terms and Conditions.

Provide Conditions for Termination

• Define the conditions under which either party can terminate the agreement
• Describe the notice period required for termination
• Specify the circumstances that would lead to automatic termination
• Detail the process for resolving disputes prior to termination
• Outline any applicable penalties or liabilities that may arise in the event of termination

Once all the conditions for termination have been outlined, you can check this off your list and move on to the next step.

Outline Circumstances in Which Agreement Can Be Terminated

• Outline what constitutes a breach of the agreement and any applicable remedies
• Provide for the right to terminate the agreement if either party fails to fulfill their obligations or meets any other conditions you’ve outlined
• Establish a period of notice that must be given before termination
• Specify the grounds for termination
• Specify the conditions for reinstatement of the agreement
• Include a clause that defines when either party can terminate the agreement without cause

Once you have outlined all the circumstances under which the agreement can be terminated, you can check this step off your list and move on to the next step.

Set Out Responsibilities on Termination

• Determine the party responsible for any termination costs and fees
• Set out any obligations that must be fulfilled upon termination
• Outline the period of notice required for termination
• Establish any restrictions or limitations on termination
• Specify the conditions under which the agreement can be terminated
• Include a clause detailing the steps to be taken in the event of termination

You’ll know this step is complete when you have included all of the necessary details on termination responsibilities and obligations in your agreement.

Clarify the Law Governing the Agreement

• Research the governing law for your agreement. This will be based on the state or country of formation of the parties.
• Research the applicable consumer protection, privacy, and other laws that may be applicable to your agreement.
• Include a clause in your terms and conditions to specify the governing law of the agreement.
• When you have included a clause specifying the governing law, you can check this step off your list and move on to the next step.

List the Governing State or Country

• Identify which state or country’s laws will be used to interpret the agreement
• If multiple states or countries are involved, consider the laws of each state or country
• Check the laws of the governing state or country to ensure they are applicable to the agreement
• Include the governing state or country in the agreement
• Once you have identified the governing state or country and included it in the agreement, you can move on to the next step.

Outline Jurisdiction Requirements

• Determine which jurisdiction’s laws apply to the agreement.
• Identify the governing state or country in the agreement.
• Do research to determine any applicable regulations or laws that must be adhered to in the governing state or country.
• Outline any applicable regulations or laws in the agreement.
• Make sure the agreement complies with the governing state or country’s regulations or laws.
• When complete, you can check this step off your list and move on to the next step.

Include a Severability Clause

• Identify and define any terms that are unenforceable or illegal, and create a severability clause that states those terms will be disregarded and the remainder of the Terms and Conditions will still be enforced
• Draft a clause that states if any term or provision of the Terms and Conditions is found to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not be affected or impaired
• Ensure your severability clause is included in the Terms and Conditions document
• Read through the document to make sure the severability clause is consistent with the rest of the Terms and Conditions
• Once you’ve reviewed the Terms and Conditions document and are satisfied with the severability clause, you can move on to the next step of determining dispute resolution options.

Determine Dispute Resolution Options

• Consider the different options for dispute resolution, such as arbitration, mediation, court action, or a combination of the three
• Consider the cost and speed of each option, and decide which one is the most suitable for your business
• Make sure to include the details of the dispute resolution method in the terms and conditions
• Make a note of the dispute resolution method that you’ve decided to use
• You have completed this step when you have included the details of the dispute resolution method in the terms and conditions

Specify Types of Disputes Covered

• Identify the types of disputes that will be covered in the terms and conditions. This can include disputes between customers, disputes between a customer and the business, and disputes between third parties and the business.
• List out the types of disputes that will be covered, such as those pertaining to breaches of contract, intellectual property, or personal injury.
• Make sure to include a clause that states that the terms and conditions apply to all types of disputes regardless of whether or not they are explicitly stated.
• Once all types of disputes are outlined in the terms and conditions, you can check it off your list and move on to the next step of outlining options for resolving disputes.

Outline Options for Resolving Disputes

• Identify the types of dispute resolutions that are available (e.g., arbitration, mediation, or court proceedings).
• List out all of the options available, as well as their associated costs, timelines, and potential outcomes.
• Determine who will bear the cost of the dispute resolution process.
• Finalize the language in the contract that explains the dispute resolution process.

How you’ll know when you can check this off your list and move on to the next step:

• When you have written out all of the available options and finalized the language in the contract.

Establish a Third-Party Mediator

• Determine the type of third-party mediator you need. Consider a mediator with expertise in the subject matter of the dispute.
• Research and identify qualified third-party mediators in your area.
• Contact the third-party mediator and discuss the dispute resolution process.
• Negotiate a fee for the third-party mediator and draft an agreement outlining the terms.
• Include the details of the third-party mediation process in your T&C.

You will know you have successfully completed this step when you have negotiated a fee for the third-party mediator and drafted an agreement outlining the terms.

Create a Signature Block

• Establish the signature block with the name of the company, the signer’s name, and the title of the signer
• Have the signer sign and date the signature block
• Include the signature block on the final version of the Terms and Conditions
• Check that the signature block is accurately completed before moving on to the next step

Set Out Witness Requirements

• Decide whether or not you’ll require witnesses for the agreement
• If so, specify the requirements for witnesses, such as age and mental capacity
• Make sure the requirements are valid under the laws of your jurisdiction
• Add the witness requirements to the contract
• When finished, you’ll have specified the requirements for witnesses in the agreement.

Define Authority to Sign

• Identify who has authority to sign the contract on behalf of the company
• Distinguish between internal and external signatories
• Determine whether all signatories will be required to sign, or if one signature on behalf of the company is sufficient
• Prepare a signature block for each signatory
• When all of the above steps are completed, the step of Defining Authority to Sign is complete and you can move on to the next step.

Determine Whether Digital Signatures are Acceptable

• Research the legal requirements and statutes of the jurisdiction in which your business operates regarding digital signatures
• Consult with a lawyer or legal professional to ensure your business is compliant with any relevant laws
• Determine whether digital signatures are legally acceptable for your business
• Decide whether to include digital signatures as an acceptable form of signing for your Standard Terms and Conditions agreement
• When you have finished researching and consulting with a legal professional, you can check this step off of your list and move on to the next step.

Have the Agreement Reviewed by a Professional

• Contact an attorney or other professional who can review the agreement and provide input on any potential legal issues
• Ask them to review the agreement and return it with any comments or revisions
• Incorporate any comments or revisions into the agreement as needed
• Once all comments and revisions have been addressed, the agreement is ready to be finalized
• You can check this off your list and move on to the next step when the agreement has been reviewed and all comments and revisions have been addressed.

Research & Select a Professional

• Research and select a professional who specializes in the field of contracts and agreements
• Review their qualifications, professional experience, and customer reviews to ensure they are a good fit for your needs
• Request a quote and timeline for the work that needs to be completed
• Once you have found a professional who is a good fit and you have received a quote, the next step is to provide the professional with the requested information
• You will know this step is complete when you have selected a professional, received a quote, and provided the professional with the requested information.

Provide Professional with Requested Information

• Gather all relevant information and documents, such as company information and existing contracts
• Provide requested information to the professional in a timely manner
• Answer any questions the professional may have
• Once the professional has all the information they need, you will know that you can move on to the next step

Review Professional’s Feedback & Make Necessary Changes

• Read the comments and feedback provided by the professional
• Make changes and edits to the standard terms and conditions as necessary
• Double check the document for any errors or discrepancies
• Make sure all changes and edits are in line with the legal requirements
• Once all changes and edits are complete, save the document
• Check off this step from your list and move on to the next step

FAQ:

Q: Do I need to create specific terms and conditions for my business?

Asked by Sarah on June 8th, 2022.
A: Whether you need to create specific terms and conditions for your business depends on a variety of factors. In some countries and jurisdictions, such as the UK and EU, there are certain laws and regulations that require you to have certain terms and conditions in place in order to operate legally. Additionally, the type of business you are running may require certain additional terms and conditions, particularly if you are dealing with customer data or providing a service. It is always best practice to have clear and concise terms and conditions in place for any business, so it is worth considering if your business could benefit from having one.

Q: What should I include in my terms and conditions?

Asked by John on October 15th, 2022.
A: The content of your terms and conditions will depend on the type of business you are running and the services or products you are offering. Generally speaking, your terms and conditions should at least cover topics such as refunds, delivery times, payment methods, warranties, customer data protection and privacy policies. Depending on your sector or industry, there may also be other topics that should be included; for example, if you are providing a technology-based service then you may need to include clauses about intellectual property rights or software licensing.

Q: How do I ensure my terms and conditions comply with UK law?

Asked by Emily on December 28th, 2022.
A: In order to ensure that your terms and conditions comply with UK law, it is important that you familiarise yourself with the relevant legislation in your area. This includes the Unfair Contract Terms Act 1977 (UCTA) which provides guidelines on how contracts should be formed between businesses and consumers. Additionally, the Consumer Rights Act 2015 (CRA) provides further guidance on certain aspects of consumer contracts such as delivery timescales and refunds. It is important that any clauses included in your terms and conditions comply with these acts in order to ensure that they are legally binding in the UK.

Q: Is it possible to create standardised terms and conditions that can be used across multiple countries?

Asked by Michael on April 4th, 2022.
A: It can be difficult to create standardised terms and conditions that can be used across multiple countries due to different laws and regulations that may apply in each jurisdiction. In order to make sure that your terms and conditions comply with all applicable laws across multiple countries, it is best to consult with a local lawyer who can provide advice on any specific requirements for each country or region. Additionally, it may also be beneficial to include certain clauses in the terms which allow for them to be adapted for different jurisdictions if necessary.

Example dispute

Suing a Company for Breach of Standard Terms and Conditions

• Identifying the relevant standard terms and conditions in the contract.
• Showing that the company has violated the terms and conditions of the contract.
• Demonstrating that the plaintiff has suffered damages due to the company’s violation of the terms and conditions.
• Proving the company’s liability for the damages suffered by the plaintiff.
• Negotiating a settlement or requesting a court order for damages to be paid.
• Calculating damages based on the severity of the breach, the financial losses suffered by the plaintiff, and the cost of bringing the lawsuit.

Templates available (free to use)

General Terms And Conditions For Services Customer Friendly
General Terms And Conditions For Services Service Friendly Provider
General Terms And Conditions For The Purchase Of Goods And Services Buyer Friendly
General Terms And Conditions For The Sale Of Goods And Services Seller Friendly

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