When it comes to legally protecting your online business, there’s a lot of legal jargon and confusing terms that can make you think… “Wait! Does that apply to me? Do I really need that contract or legal policy?”

And honestly, it can be hard to know if something really applies to you and your business without fully understanding what the contract or legal policy is and what purpose it serves. 

I often find that is the information that’s missing. People are quick to scare you into thinking you have to have XYZ without providing any necessary context and that’s NOT what I’m about here at The Boutique Lawyer. 

I want you to fully understand all the ins and outs of the legal things that are recommended vs. required and THEN I want to make sure you have any easy way to actually implement those things in your business. 

First comes the education, then comes the application, ya feel me?

So with that said, in this blog post we’re diving into one of the most confusing areas for entrepreneurs, course creators, and digital product sellers and that is understanding the difference between a Terms of Use and a Terms of Purchase.

The two sound similar, but they serve very different purposes! Knowing when and how to use each one can help you stay compliant, set clear expectations with your customers, and protect your business from costly disputes down the road.

What is a Terms of Use?

We’ve got lots of ground to cover, so we’re just going to jump straight into Terms of Use. 

Your Terms of Use is a website contract that tells visitors they can use and interact with your website, even if they never buy anything.

It’s like the “house rules” for your online space, setting the boundaries for how people can access your site, what they’re allowed to do with your content, and what legal rights you retain as the site owner.

For example, let’s say you’re a business coach who publishes free blog posts and downloadable resources. Without a Terms of Use in place, someone could take your resources, rebrand them, and use them as their own without technically violating any posted policy.

A solid Terms of Use makes it clear that your content is protected by copyright, can’t be reproduced without permission, and defines what’s considered acceptable use of your materials.

Some of the most important clauses inside your Terms of Use include:

• Intellectual Property Rights – this clause clarifies that all website content (images, text, downloads, videos, etc.) belongs to you and cannot be copied, republished, or resold
• Acceptable Use Policy – this clause outlines what users can and cannot do on your website (no spamming, hacking, or scraping your content)
• Disclaimers – these protect you from liability for how users interpret or use the information on your site
• Governing Law – this clause states which jurisdiction’s laws apply if a dispute arises
  

👉 When you need it: EVERY website owner needs a Terms of Use page!

Whether you’re a coach, creative, or digital product seller, it’s the first layer of protection that keeps your website legally compliant and your content safeguarded.

What is a Terms of Purchase?

Now that you’re clear on what a Terms of Use is, let’s move into Terms of Purchase. 

Your Terms of Purchase is a sales contract that governs what happens after someone hits “buy.”

This legal agreement outlines the terms of the actual transaction between you and your customer and covers things like refunds, payment plans, delivery timelines, and customer responsibilities.

Some of the key clauses inside your Terms of Purchase include:

• Refund and Cancellation Policy – this clause spells out your refund terms clearly (especially crucial for digital downloads and courses)
• Payment Terms – this clause details how and when payments are made, what happens if a payment fails, and late payment fees if applicable
• License and Usage Rights – this clarifies how customers can use your content — for personal use only or with specific resale permissions
• Disclaimers – these reinforce that you’re not guaranteeing specific results from the product or service purchased
• Intellectual Property Protection – this clause states that buyers don’t own or have the right to resell your materials.
  
  

👉 When you need it: Any time you’re selling something online!

Whether it’s a coaching package, course, or digital product, you need a Terms of Purchase (often called Terms and Conditions) in place. It’s what makes your sales legally binding and protects your income when issues like refund requests or chargebacks arise.

But here’s the thing: you need DIFFERENT Terms of Purchase for digital and physical products because they are not the same. 

The Key Difference Between Terms of Use and Terms of Purchase

Now that you know what both contracts are, let’s review some of the key differences between the two so that you can very clearly determine which one(s) apply to you and your business!

👥 Audience

• Terms of Use → Everyone who visits your site.
• Terms of Purchase → Only people who buy from you.

📄 Purpose

• Terms of Use → Sets expectations for your site visitors.
• Terms of Purchase → Defines the sale agreement for your customers. 

✅ Covers

• Terms of Use → Copyright, disclaimers, conduct rules.
• Terms of Purchase → Payments, refunds, licensing, delivery.

🤝 Protects You From

• Terms of Use → Misuse of your site or stolen content.
• Terms of Purchase → Chargebacks, refund disputes, or misuse of your paid materials.

And to make it even more simple for you, here’s a quick checklist to help you understand if you need one or both contracts!

You need a Terms of Use if:

✔️ You have a website or blog
✔️ You share original content or media
✔️ You collect user information (like emails)

You need a Terms of Purchase if:

✔️ You sell courses, templates, or digital products
✔️ You offer services or memberships
✔️ You use payment plans or sell on autopilot

The Ultimate Legal Bundle for Online Business Owners

At the end of the day, your contracts are what make your business legitimate. They protect your money, your content, and your reputation, while giving your customers confidence in working with you.

The contracts that you specifically need often depend on your business, but there are some contracts that almost EVERY business owner needs, which is why I created the ultimate legal bundle for online business owners. 

It’s called the Chief Legal Officer Suite and features 40+ attorney-drafted agreements designed specifically for online business owners, including Terms of Use and Terms of Purchase contract templates. 

So if you know that you’ve been neglecting the legal side of your business and are ready to change that, but don’t know where to start, you’re in the right place. 

CLICK HERE to learn more about the CLO Suite and get the exact contracts you need to sell, serve, and show up legally online.

* * *

Written by Amber Gilormo, founder of The Boutique Lawyer, a licensed attorney who helps creative entrepreneurs protect their work with legally sound contracts, trademarks, and business systems. Her signature collection of creative-friendly legal templates has supported over 7,000 business owners in protecting and scaling their brands.

Here’s how you can stay connected:

🖋️ Let’s be pen pals! Subscribe to my email list to receive all of my best biz tips and behind the scenes goodies to keep your business bringing in sales (legally of course).

📄Binge the blog to get all of the legal information you need about running a business in a way that actually makes sense to your non-legal brain.

👋 Come hang with me on the ‘gram! I often do AMA’s on stories, so you can submit your specific questions when they come up.