Client Agreement, Terms of Use, Terms & Conditions…when do I use what??

For years now, the #1 question I get from my customers and clients is when to use the Client Agreement, versus Terms of Use, versus Terms & Conditions. These are 3 of the 6 documents I offer in my Signature Beginners’ Legal Bundle template pack for coaches and entrepreneurs (CHECK THEM OUT HERE!) and they are actually all used in different scenarios, depending on what you’re selling, and how you are selling it. 

Stick with me – let’s outline scenarios where you’d use each of the three documents: 

CLIENT AGREEMENT

Let’s say you’re offering 1:1 coaching or consulting services – you talk with each potential client on the phone or via email / social media messaging, and when they decide to hire you, you send them an individualized invoice and start the onboarding process. There are a lot of different variations to this and different ways you could do it, but the important part of it is that they need YOUR involvement in order to complete the purchase and begin working with you / your team. 


If this sounds like what you’re doing, or something you offer, this is where you’d use the CLIENT AGREEMENT. The CLIENT AGREEMENT is the legally binding agreement between you and your client that will outline the details of what they’re purchasing, the services you’ll provide, the cost for the services, any details regarding payment plans, and all applicable disclaimers and limitations of liability for the services you’ll provide. You will send it to your prospective client for them to review and sign, BEFORE they complete payment to you and BEFORE you start working with them. 

THIS IS CRUCIAL – THE DOCUMENT MUST BE REVIEWED AND SIGNED BEFORE YOU BEGIN WORKING WITH THEM. The contract is your offer – they must review it, agree to it, and make payment BEFORE you start working with them, if you want the contract to be legally valid. 

TERMS OF USE

Now, let’s say you’re offering some kind of online course, group program, or digital product online, that customers can purchase directly from a sales page, or from your website. They don’t need any involvement from you in order to sign up or purchase the product (YAY PASSIVE INCOME). 

BUT – this gets tricky when it comes to getting all your customers and clients who come into your community this way, to sign client agreements confirming the terms related to the purchase of their product or service. 

ENTER TERMS OF USE. This is the agreement that will live on your sales /purchase page. When customers come to your purchase page and wish to complete a purchase of your course, product, or program, they will need to click the link for the TERMS OF USE, review them, and then come back to the purchase page to check a box confirming they have read and agree to the TERMS OF USE associated with the program they’re purchasing. 

TERMS OF USE LEGAL TIPS: 

(1) You always want the Terms of Use to be specific to what they’re purchasing – so if you have an online course AND an e-book, you’ll want 2 Terms of Use (same template, customized two ways) 

(2) Make sure the box checking is MANDATORY before they can complete purchase. 

(3) DO NOT skip this step. Many online entrepreneurs are selling hundreds, if not thousands of courses without these docs in place. The issue here is that when something goes wrong, when a customer is not satisfied with their purchase, or anything else comes up, you’ll NEED this document to show there was an agreement between you and this customer. This document will govern the way you handle any legal dispute, and will make everything a MILLION times easier than trying to deal with the drama of not having any legal agreement in place. (Hint: I’ve had entrepreneurs spend $10,000 + on legal fees due to not having this in place. The cost of the template is $400. It’s worth it.) 

Now, I have been doing this for years, and am well aware that many software programs make this challenging. SO many people in this space don’t understand the legal requirements for running a compliant online business, and because of this, they haven’t made their software compatible with these requirements. For example, one very popular platform will only allow you to upload ONE terms of use for your entire library of courses / programs. This is problematic, as you technically need one Terms of Use for each program. To solve this, I recommend consolidating all Terms of Use documents into one PDF and then ensuring the customer sees there are multiple, and can review the Terms of Use applicable to the course or product they are intending to purchase. 

TERMS & CONDITIONS

Lastly, the Terms & Conditions. I would guess that 99% of the time, entrepreneurs confuse Terms & Conditions with Terms of Use. UNLIKE the TERMS OF USE associated with a program, course, or online product you’re selling, your website Terms & Conditions are simply the ground rules for your website. This is where you protect the IP on your website, outline how any disputes relating to your website will be resolved, outline how people can interact with your website, and CYA for any bullying or copyright infringement that may happen in the comments of your blog. This has nothing to do with any of your paid programs or services, and is JUST the ground rules for your website. 

Now, if this is new to you — don’t worry. SO many people get this wrong, which is the motivation for this post, and a mistake you will now know to correct!! Anytime I see an online coach’s sales page for a course or product, I click on the “Terms” link on the purchase page, and the VAST majority of the time, the link takes me to their Website Terms & Conditions. As you now know…this does nothing for them in terms of limiting liability or addressing terms relating to the paid product or service in any way — the Terms & Conditions simply outline how one may use the website. 

SO – when you have a customer agree to your website Terms & Conditions at checkout…this actually does nothing for you. Instead, you need to make sure you have an applicable, customized, relevant TERMS OF USE linked on that purchase page, and that the customer agrees to that prior to making any purchase. 

If you do that, you will be ahead of MOST business owners who sell products online, and less likely to be one of the ones who ends up spending 5 figures on legal fees to sort out a simple issue that could have been avoided with proper TERMS OF USE in place. 

TO RECAP: 

  1. CLIENT AGREEMENT – the legal agreement between your company and your client, for 1:1 services, private coaching, and other services where you personally sell to them and onboard them. This agreement needs their signature, and will be specific to the program THEY are purchasing. 
  2. TERMS OF USE – the legal agreement between your company and your customer purchasing an online course, digital product, group coaching, or any other digital product you sell directly from your website, where they don’t need you to complete purchase. They will not sign it, but will agree to it by checking a box at checkout confirming they have read and understood it. It will be customized to the course/program/product you are selling. 
  3. WEBSITE TERMS & CONDITIONS – the legal document you post in the footer of your website, which acts as the ground rules for your WEBSITE only, and is not applicable to any paid services or products you offer. Should not be referenced on ANY purchase page, and none of your clients or customers should be checking a box saying they agree to your Website Terms & Conditions. 

NEED these docs? CLICK HERE to check out my DONE FOR YOU legal bundles, drafted specifically for online business owners. 

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