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Termageddon Blog

Privacy Policy vs. Terms and Conditions

If you have been paying attention, you have probably noticed that most websites that you visit have a Privacy Policy and Terms and Conditions (also referred to as a Terms of Service or a Terms of Use). You have probably also asked yourself what these documents are, how they differ from each other, and whether your website needs them as well. In this article, we will break down the differences between a Privacy Policy vs. Terms and Conditions and explain why you need to have both to protect your website and your business.

What is a Privacy Policy?

A Privacy Policy is a document that explains your privacy practices such as how you collect, use, and disclose Personally Identifiable Information (PII). A Privacy Policy is usually required by law for websites that collect PII such as names, emails, phone numbers, physical addresses or IP addresses through tools such as contact forms, email newsletter sign up forms, eCommerce portals and analytics.

Each privacy law that applies to you dictates the disclosures that your Privacy Policy needs to contain, which is why it is crucial to start the policy creation process with determining what privacy laws apply to you. The following laws can apply to websites that collect PII:

  • California Online Privacy Protection Act of 2003 (CalOPPA) – a privacy law that applies to any website that collects the PII of California residents;
  • California Consumer Privacy Act (CCPA) – a new privacy law that protects the PII of California residents;
  • General Data Protection Regulation (GDPR) – a privacy law that protects the PII of European Union residents and applies to businesses outside of the European Union as well;
  • United Kingdom Data Protection Act 2018 (UK DPA) – a privacy law that protects the PII of United Kingdom residents and applies to businesses outside of the United Kingdom as well; 
  • Delaware Online Privacy and Protection act (DOPPA): a privacy law that applies to any website that collects the PII of Delaware residents;
  • Nevada Revised Statutes Chapter 603(A) – a recently amended privacy law that protects the PII of Nevada residents;
  • Personal Information Protection and Electronic Documents Act (PIPEDA) – a privacy law that protects the PII of residents of Canada;
  • Australia Privacy Act of 1988 – a privacy law that protects the PII of residents of Australia;
  • Colorado Privacy Act – a privacy law that protects the personal data of residents of Colorado and goes into effect July 1st, 2023.
  • Virginia Consumer Data Protection Act (VCDPA) – a privacy law that protects the personal information of residents of Virginia and goes into effect January 1st, 2023.

It is important to note that the application of privacy laws is not based upon where you or your business is located but rather on whose PII you are collecting, where your customers resident, where you offer goods or services, and who you track on your website. Thus, the privacy laws listed above can apply to you even if you are not located in those states or countries.

Your Privacy Policy will also need to be updated from time to time as new privacy laws are passed or existing privacy laws are amended, requiring new disclosures to be made. For example, there are over 20 proposed privacy bills in the United States alone and other countries such as Canada are proposing complete overhauls of existing privacy legislation, all of which would require Privacy Policy updates. Lastly, not having an up to date Privacy policy can lead to severe consequences as privacy law violations can lead to heavy fines starting at $2,500 per website visitor to €20,000,000 or more in total.

In conclusion, a Privacy Policy is a document that helps you comply with privacy laws and avoid privacy-related fines and lawsuits by explaining your privacy practices to consumers.

What are Terms and Conditions?

Terms and Conditions (also called Terms of Use or Terms of Service) are a statement that details the rules of using your website, thereby helping you protect your business and limit your liability. While technically not required by law for all websites, Terms and Conditions is extremely valuable as it can help you:

  • Get approval to use third party payment processors such as Stripe or PayPal;
  • Answer commonly asked customer questions regarding returns, refunds, and cancellations and thus help move customers towards making a purchase;
  • Lessen your liability by specifying what warranty, if any, you offer on the website or on purchases made on your website;
  • Protect your intellectual property and help reduce the likelihood of costly intellectual property infringement lawsuits;
  • Save costs by specifying where disputes will be resolved;
  • Lessen the amount of damages that you may be responsible for in case of a dispute;
  • Maintain control over your website and its users.

Depending on where your business is located, your Terms and Conditions may also need to include clauses on warranties, returns, refunds, and cancellations that comply with your country’s consumer protection laws.

In conclusion, Terms and Conditions are used to answer commonly asked customer questions, limit your liability, and protect your business.

While there are quite a few differences between a Privacy Policy vs. Terms and Conditions, both of these documents work together to help you avoid fines and lawsuits and limit your liability, thus helping you protect yourself and your business. If you do not currently have these policies in place or if your policies are outdated or incomplete, use Termageddon’s Privacy Policy generator and Terms and Conditions generator to create your comprehensive policies today.

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