Small Business Terms of Service Template

Treat the terms of service as the hub of four documents. They settle the deal and point to the other three by name instead of restating them, so a refund window or data promise lives in one place and can't drift.

These are standard terms that every customer accepts as written. If you negotiate terms with each client, you need a service agreement and statement of work instead.

Bought or generated policies describe a generic business. Your support inbox, billing system and customer database already answer most of what a policy asks, so pull these records before you draft:

• Recent refund and cancellation requests, and what each customer got
• The steps to cancel, counted against the steps to sign up
• What happens to a closed account's data, checked in the database and backups
• Any price or term change for existing customers, and how they were told
• Every outside tool that receives customer data, including analytics and ad pixels
• The states and countries your customers are in

Compare each record with the clause you meant to publish. Where they disagree, change the clause or the practice, because a published policy is a promise. When companies tell consumers they will protect their personal information, the Federal Trade Commission (FTC) says it takes law enforcement action to make sure they keep those promises¹.

If customers pay on a schedule, write this part with your checkout open. In the US, the Restore Online Shoppers' Confidence Act² governs consumer subscriptions sold online. It requires sellers to disclose every material term before asking for billing details, get express informed consent before charging and provide a simple way to stop recurring charges.

California's automatic renewal law³ adds detail for people there who subscribe for personal use. Its rules make a good checklist for any subscription, so walk through your flow in this order:

1. 1

   Count the clicks

   Sign up as a customer would, then cancel, counting the steps each way. California requires an online way to cancel for customers who signed up online: a prominent link or button, or a ready-made email they can send as is.

2. 2

   Put the terms beside the button

   Show the price, renewal period and cancellation policy right next to the request for consent. Then send a confirmation they can keep that explains how to cancel.

3. 3

   Schedule the reminders

   When a first term lasts a year or longer, remind the customer 15 to 45 days before it renews.

4. 4

   Warn before a price change

   Tell existing subscribers about a fee change 7 to 30 days before it takes effect, and include how to cancel.

Then write the cancellation clause from the result. Name the real mechanism, such as a button under Billing, and say when cancellation takes effect.

A good refund policy answers five questions: how long customers have to ask, what happens after that, how annual plans are prorated, what you never refund and how to ask. Pick one proration formula, such as unused months at the monthly rate, so identical requests get identical answers.

Post it where buyers decide. New York requires online sellers of goods to show their refund policy near the item or before asking for billing information⁴. A seller that doesn't must give a cash refund or credit, at the buyer's choice, on unused, undamaged goods returned within 30 days of purchase.

Card disputes turn on the same text. Stripe, the payment processor, advises merchants to describe their refund and cancellation policies in their terms of service⁵ and show the full policy before purchase. A checkbox with only a link may not convince a card issuer that the customer saw it.

Build the acceptable use policy from rules you already apply. If a dozen customers share one login and you've never stopped them, either enforce a seat limit or price for shared use, then make the clause match.

Leave out anything that stops customers from reviewing you. The FTC says the Consumer Review Fairness Act makes it illegal for terms and conditions to prohibit or punish negative reviews⁶. It tells businesses to remove such clauses even if they have never enforced them.

Give each document an effective date, and link all four from your footer and checkout. Save every old version with the dates it applied, since a dispute may turn on the version a customer accepted.

Tell customers before a material change takes effect, and be most careful with data. FTC staff singled out one practice in a February 2024 post. Starting to share customer data with third parties may be unfair or deceptive if your only notice is a quiet, retroactive amendment⁷ to your terms or privacy policy.

After that, check the documents against your records every quarter. Check again whenever you add a tool that receives customer data, change a price or start selling in a new state.

Selling software? The terms of service tool for SaaS and apps goes deeper on sign-up wording and disputes. The small business privacy policy template starts from a map of your data. To check each clause against your records faster, open this template in River with Edit with AI.