If you are like me, you’ve scrolled past thousands of terms and conditions without reading them. If my website’s traffic is any indicator, almost no one cares about the terms and conditions of this site. Nonetheless they are important for several reasons. Here’s one very important reason: my advertisers require that I have one. I have to keep those people happy.

Terms and conditions and all the other digital paperwork are needed because eCommerce transactions are not as simple as walking into the local grocery store and picking up a loaf of bread and a quart of milk. When you go to a store, make a purchase, and walk out of the store, you probably disregarded some terms and conditions without knowing it. For example, you might have missed signs stating the refund policy or that the management reserves the right to refuse service to anybody. Those are terms and conditions in real time, and by completing a purchase, you have agreed to them. Last week, I was at Universal Studios in Orlando and I noticed a sign that said that by entering the park, I was granting them a license to use my likeness in their marketing. It made me wonder if a celebrity that endorses Disney can go in. Imagine the can of worms it would open up if Universal put out a commercial involving that celebrity.

Create Your Own Terms and Conditions

When you create your terms and conditions, you could review a dozen sites and “Frankenstein” your own terms and conditions. With any luck, the results will be better than they were for Frankenstein and his monster. At the very least there won’t likely be any torches and pitchforks.

Now there’s a online terms and conditions generator from companies such as Shopify. It would have made my life easier. If I were a small business starting from scratch, I’d start there.

Be Careful with your Terms and Conditions

When a purchase made through a website has more purchasing steps and nearly infinite space for them, the terms are more complicated. In fact, they are complicated enough to trip up large companies like Zappos who had its entire user agreement voided by a federal court. I highly recommend reading that article to avoid their pitfall.

Terms and conditions that are termed “browse wrap” have been thrown out of court, as in the case of Harris v. Blockbuster, for being what the court termed “illusory and unenforceable.”

Cover Your Assets

Terms and conditions such as privacy policies, terms of use, terms of sale, and refund policies are meant to protect the sellers and service providers from losses. By clearly stating what you will and will not do, how you use the customer information entrusted to you, and what policies cover your activities on your website, you are limiting the financial harm that you might experience in a lawsuit brought by a disgruntled customer who feels wronged or injured by your company or the goods or services that you’re selling. In a sense, such documents act like a fence setting out legal boundaries to your liability. They play a part in protecting you from litigation so long as you have fulfilled in good faith all your responsibilities to your customers. Of course, the definition of “good faith” in the case of a merchant transaction is open to interpretation.

Acting in good faith require some effort and transparency. This is why I have a “Quick Non-Legalese Version” section to start my terms of conditions. I want to make sure that I’m transparent. I recommend you do the same.

Quite literally, terms and conditions are cheapest insurance policy you can get. Don’t be “Lazy” and put it off.