Terms of Service - B2B (non-SaaS)
Terms of service set out the terms and conditions on which a company provides services to its customers who are businesses (rather than consumers).
What are Terms of Service?
Terms of service are also known as terms of use, terms and conditions of service, terms and conditions and terms and conditions for the supply of services.
Terms of service are typically included on the company’s website or appended to order forms. They will be drafted in a general way so that they can apply to all contracts that the company concludes with customers. The terms therefore do not include details such as pricing or the specific products ordered (these details will be agreed individually with each customer and will generally be recorded using an order form or via an email confirmation). Additionally, there is no requirement that the customer sign the terms of service, although customers should indicate that they have agreed to the terms as part of the order process (this is usually confirmed in the order form or email confirmation).
Why are Terms of Service important and why should you use it?
By adopting a general set of terms of service the company avoids having to agree contractual terms with each customer individually. This not only saves time and money on legal fees but also creates a smoother sale process.
The terms of service will cover a number of key legal areas including:
the maximum liability of the service provider;
how to terminate or cancel the services and what happens when the services are canceled; and
ownership of intellectual property created as a result of, or used in connection with, the supply of services.
Additionally, the terms can be used to provide customers with important information such as:
how to contact your company;
how to submit a complaint; and
how the customer must pay for the services.
What are the common pitfalls when using Terms of Service?
There are a number of consumer protection regulations that must be complied with when providing services to consumers. These do not apply when providing services to businesses.
In most instances these terms can and are used in conjunction with the other policies and agreements between the parties. For example, a purchase order form or a data processing agreement (DPA). It is therefore very important that the terms do not contradict the other documents as that would cause confusion as well as potential legal issues.
It is not uncommon for companies to copy terms from other companies. This often results in legal and operational issues as the terms do not reflect the actual business of the company, i.e. the terms are not suitable for limiting the risks, identifying processes etc of the company. When creating your terms you should go through the terms thoroughly and consider if each term matches the actual situation that your company might face.
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