How To Create Terms and Conditions for an Online Store

This post is for information only. You are responsible for reviewing and using this information appropriately. This content doesn’t contain and isn’t meant to provide legal, tax, or business advice. Requirements are updated frequently and you should make sure to do your own research and reach out to professional legal, tax, and business advisers, as needed. To sell products using the Shopify platform, you must comply with the laws of the jurisdiction of your business and your customers, the Shopify Terms of Service, the Shopify Acceptable Use Policy, and any other applicable terms and policies.

Terms and conditions (T&C) are the legal documents that govern the relationship between an online store and its users.

For your business, a T&C is a legal safeguard that limits liability and sets expectations upfront. For users, it’s the reference point for what they can expect and what recourse they have in a dispute.

Here’s what T&C for an online store are, the major clauses an ecommerce T&C document typically include, and the practical steps for creating, publishing, and maintaining one for your online business.

What are terms and conditions for an online store?

A terms and conditions (T&C) agreement—also known as a terms of service or user agreement—is a legal document that defines the rules for using your ecommerce website. It explains what users can and can’t do, and what you will and won’t do in return.

In practice, it covers each party’s rights and obligations under the agreement. It often explains what your store promises to deliver and how it handles payments, shipping, and returns. It typically also covers what customers agree to in exchange, like using your site as intended and providing accurate information at checkout. 

T&Cs typically sit alongside an ecommerce store’s separate and expanded privacy policy and return policy. They generally apply to both the client and the business from the moment someone creates an account, places an order, or otherwise uses the site. 

Are T&Cs legally required?

In the US, no single federal law requires every ecommerce website to publish a T&C page. But specific rules apply to practices like advertised claims, warranties, and affiliate disclosures, all of which commonly appear in a T&C agreement. 

The Federal Trade Commission (FTC) publishes a “Rules of the Road” guide for internet advertising, including guidance on staying compliant. It covers truth-in-advertising rules and disclosure requirements for things like warranties and subscription terms—often outlined in a store’s T&C.

Some rules define what can’t be buried in T&Cs. Subscription auto-renewal terms are the clearest example. Both New York and California require auto-renewal terms to be presented clearly and conspicuously, in visual proximity to the request for consent and set apart from the surrounding copy. Folding this disclosure into your broader T&Cs won’t satisfy either requirement.

Not every store requires you to explicitly agree to the T&Cs, via a checkbox or otherwise. Many checkouts simply link to the policies in a conspicuous place rather than requiring a click—a practice known as browsewrap or implied consent. This type of agreement doesn’t always hold up if a court determines the T&C agreement isn’t conspicuous enough.

Because requirements vary by state and by country, treat this guidance as a starting point, not legal advice. Have any T&C agreement reviewed by an attorney familiar with your business and the regions where you sell.

How T&Cs help set expectations and reduce disputes

Clear terms inform users about your business practices and are designed to get ahead of problems rather than react to them. A well-drafted agreement helps both you and the customer resolve disputes efficiently, often through an informal customer service process, to avoid any formal legal action. That can lower legal fees for both sides and preserve relationships you might otherwise lose to a simple misunderstanding.

Take a late or missing shipment, for example. Good T&Cs spell out that delivery windows are estimates and clarify who’s responsible once you hand a package off to a carrier. With that documented upfront, a customer service rep can often resolve the complaint on the spot with a store credit or refunded shipping fee instead of it escalating to a chargeback or a demand letter.

What do typical online store T&Cs include?

• Account registration and user responsibilities
• Product information and pricing
• Payments and transactions
• Shipping and delivery
• Refunds, returns, and order cancellations
• Intellectual property rights
• Limitation of liability and disclaimers
• Governing law and dispute resolution

Typical ecommerce terms are built on a foundation of a few essential clauses:

Account registration and user responsibilities

This section covers what happens when someone fills out a web form to create an online account. It includes what user details you collect, how you use them, and what counts as implied consent to the rest of the agreement. 

It’s also where you reserve the right to reject applications from restricted parties and notify users of policy changes. Additionally, it outlines when you can terminate accounts, including whether you can close user accounts with or without prior notice.

Product information and pricing

This section addresses how you present product descriptions, images, and prices, and it may include a disclaimer that you can’t guarantee your content will always be error-free. It’s where you reserve the right to correct pricing mistakes and end sales early on limited promotions.

Payments and transactions

The payments clause lists accepted online payment methods, when a customer is charged in relation to completing the online purchase, and how the store handles a failed payment method. This is also where promotional codes are addressed, including the store’s right to reject promotional codes that were issued in error or used outside their terms.

Shipping and delivery

This section covers shipping costs, how you calculate delivery timeline estimates, and what happens if a shipment is delayed or lost.

Refunds, returns, and order cancellations

Rather than restating your entire return and refund policy, your T&Cs can simply reference it as one document in a broader policy set. This may include the return window, the condition requirements (tags on, original packaging, unworn), and who covers the cost of return shipping. 

What matters more is keeping the two documents in sync. A mismatch between your T&Cs and your refund and return policy can be a source of customer disputes. If one says 30 days and the other says 60, a customer will hold you to whichever favors them.

Intellectual property rights

An intellectual property clause explains who owns your store’s logos, trademarks, product photography, designs, and other commercial branding. It typically limits customers to their own personal use of that material. 

It also covers user-generated content (UGC), or the product photos or reviews customers submit. It may specify whether you can reuse that content without having to license material from the customer first.

Limitation of liability and disclaimers

The liability clause may limit your store’s exposure from issues like site downtime, third-party websites linked from your store, or personal-injury loss claims, in some cases to the maximum extent permitted by applicable law. A disclaimer notice typically states that using the site is at the customer’s own risk.

Governing law and dispute resolution

The governing law clause names the jurisdiction whose law applies if a dispute between your company and the customer ends up in court—sometimes called the prevailing law. 

This section typically also lays out how disputes are to be resolved (through mandatory arbitration, for instance) and how legal fees are handled if a formal case proceeds and is decided in one party’s favor.

How to create and publish your online store’s T&C

1. Start with a template
2. Customize the template for your business
3. Add it to your store’s back end via the Shopify admin
4. Publish it as a page and link to it in a few key places
5. Keep policies current

Creating your own T&Cs follows the same basic process no matter what platform your online store runs on: draft it, customize it, publish it, and keep it current. These steps use Shopify as a working example, since its policy generator and built-in policy fields map directly onto each stage:

1. Start with a template

Shopify’s free policy generator lets you access a sample ecommerce terms and conditions document built around essential clauses—without a subscription or account.

Shopify has a built-in template for standard terms of service. Shopify merchants can find the feature under Settings > Policies. Review the template wording and adjust before saving it.

2. Customize the template for your business

Adjust the templated language to reflect your products, the regions you serve, and your existing policies. That might include a return and refund policy, or your own agreements with shipping carriers or payment processors. You could have the draft reviewed by a qualified attorney before publishing.

3. Add it to your store’s back end via the Shopify admin

Do this through Settings > Policies. Paste the finished agreement into the Terms of Service field alongside your separate return, privacy, shipping, and legal notice policies. 

Once saved, these are automatically linked in the footer of your checkout pages. A link to your return policy also appears on the order review page, and a link to your shipping policy shows on your product pages and cart.

4. Publish it as a page and link to it in a few key places

The guide to creating and editing pages covers how to publish the agreement as a standalone page on your Shopify site, as well as how to add it to your site’s main navigation menu.

5. Keep policies current

Review your policy language regularly to keep pace with new laws that change what you have to disclose to customers.