10 Must-Haves for All Terms and Conditions for Digital Products
Want to know what you need in your terms and conditions for digital products? These are the essential terms you need to protect your content and money.
Selling your own digital products is extremely fun and exciting, and if you’re anything like me, you are researching everything you need to ensure you have everything you need to protect your content and your money legally. As a lawyer myself who drafts contracts for online entrepreneurs like you, I am giving you the essential terms you need in your terms and conditions for digital products.
I will tell you what you need in your terms and conditions for digital products, like a terms and conditions generator, and I’ll tell you how to license a digital product.
After learning about what you need in your terms and conditions for digital products, you will have everything you need to protect your content from copycats and your hard-earned money.
This post is all about the crucial elements all terms and conditions for digital products must have.
Ultimate Terms and Conditions for Digital Products
Terms of use for digital downloads
Now, let’s get into the “meat” of this blog post and what exactly those crucial elements are for your terms and conditions for terms of use for digital downloads.
1. Access (limitations)
First, you must explain how your customers can access/download your digital products after their purchase. Do they receive a link within your shop after purchase? Will they get access through their user accounts? Will a link be sent via WeTransfer or email? Or are you using a third-party digital distribution platform, like WeTrasnfer? Describe the exact process.
You must mention how long the download link will work. Explicitly state that your customers can no longer access your digital products if they do not download them within that time limit. You may still choose to send them a new link if they ask you to, but they are no longer entitled to receive those products. You snooze, you lose!
Also, include the right to refuse access and cancel the download link if your customers do not comply with your terms of use for digital downloads, like if their payment is cancelled or charged back.
2. Format & compitibility
Your terms and conditions for digital products should specify the file format(s) in which you make those products available to your customers.
For example:
“PDF (Portable Document Format)” if you sell eBooks or meal plans.
“DOCX (Office Open XML)” if you sell workbooks in the form of Word documents.
“PNG (Portable Network Graphics)” if you sell photos, digital designs or digital art.
“MP4 (MPED-V AVC)” if you sell videos.
If you sell digital products in multiple formats, name all of them.
Then you want to specify the software and devices you recommend your customers use for your digital products.
For example:
- “Adobe Acrobat Reader” and “Amazon Kindle” if you sell eBooks in PDF format.
- “Microsoft Word” and “Pages” if you sell Word documents.
- “Preview” and “Adobe Illustrator” if you sell photos or graphics in PNG format.
- “VLC Media Player” or “QuickTime Player” if you sell videos.
Explicitly state that your digital products are designed to be compatible with the software and devices recommended, but you are not responsible for their compatibility. You must include the proper disclaimers because your digital products may work with those devices and software now, but future changes in your products or the software itself may make them incompatible.
3. Disclaimers
That brings me to the next crucial element of your terms and conditions for digital products; a disclaimer. You need to protect your business from potential liability by including several disclaimers besides disclaimers for your products’ compatibility. Therefore, you must clearly state that your digital products are provided on an “as is” basis.
To avoid any liabilities due to expectations your customers may have, however unreasonable they may be, you need to explicitly state that you do not provide any warranties or guarantees, either expressed or implied. Your customers may have certain expectations as to the content of your digital products that you have not even considered, so you must protect yourself against that preventatively.
You can not as to any errors or inaccuracies in your digital content, and you certainly can not guarantee the effectiveness of your products or any outcomes or results they may have for your customers. Therefore, you need disclaimers stating that you are not responsible for any of that and that you disclaim any guarantees, warranties, and liabilities.
4. Usage (not ownership) rights
Your digital products are your intellectual property that you give your customers access to but do not receive ownership of. They just receive copies, but the intellectual property is yours.
So, in your terms and conditions for digital products, you must make clear that your customers only receive a right to use your digital products.
The right to use your digital products is called a ‘license’.
5. Protection from copycats & those who overshare
That brings me to the next crucial element of your terms and conditions for digital products; protection for copycats.
You want to specify that your customers may use your digital products for personal use only, not commercial use.
It’s even more important to clearly outline what your customer may NOT use your digital products for. Specify that your customers are not allowed to redistribute, sell, or reproduce your digital products for commercial purposes.
It happens all the time that digital products are repackaged to resell them to others. You need to protect yourself from these copycats.
You want to include in your terms and conditions for digital products that your customers may not share any of the digital products with third parties.
6. Limit your liability
Regarding liability, your term and conditions for digital products must limit your liability for any damages arising from the use or inability to use your digital products. You should always exclude your liability, meaning that you may not be held liable for any direct, indirect, consequential, or incidental damages.
However, you can not exclude your liability for everything, so always set a cap on your total liability to the fee actually paid by the customer and received by you.
7. Payment options
Regarding payment, you need to consider your pricing and your potential customers’ budgets. Some customers may be unable to afford to pay the full fee upfront. Do you want to offer those customers the possibility to pay the fee for your digital products in instalments?
Due to the nature of digital products, you may not want to provide that option. You can not physically delete the digital products for a customer if they end up not paying the remaining part of the fee. Once they have it, they have it.
Even if you are fully entitled without a doubt to the remaining part of the fee but a customer does not pay you, it will likely not make financial sense to sue them. That is the reality you are faced with.
However, if your digital products are expensive and you want to make them affordable for everyone by providing the option to pay in instalments. In that case, you need to consider the different payment plans you want to offer. Your terms and conditions for digital products must be very specific about what amounts your customers pay and when.
8. Cancellation & refund policy
As I said, because of the nature of digital products, you can’t provide refunds upon the return of a digital product.
So, let’s start with your cancellation policy. If your customers are consumers (as opposed to business owners), those customers will have rights to a “cooling-off” or “withdrawal” period after their purchase unless they waive those rights specifically. So, in any case, ensure you have a waiver in your terms and conditions for digital products that explicitly states that they agree to waive those rights.
You may, however, under your own conditions, want to provide a satisfaction guarantee to your customers, meaning they can get their money back if they are not satisfied with your digital product or if it was not what they expected. I do not recommend offering refunds in that case either because your customers may, in all actuality, be happy with your digital products and still keep and use them. Who can monitor them? But some of my clients do want that, so I provide that option in my terms and conditions for digital products template.
If you want to offer refunds, specify the period during which your customers may request a refund. You must also stipulate under which conditions a student may ask for a refund and what the refunded amount will be.
And, in any case, always include that you will decide at your own discretion whether you will provide a refund or not. If you do not feel like your customer deserves it or is lying, you should be able to refuse a refund without explanation. You do not want to end up in a debate.
Then, set any other conditions your customer must meet to qualify for a refund. For example, you may require proof from your customer that your customer has tried your meal plan or filled out at least 50% of your workbook.
9. Compliance with laws
Speaking of requirements, when your customers purchase your digital products, they must provide their personal information, like their name, email and payment information.
When you collect personal information, you must comply with privacy and data protection laws. You are required by law to inform your customers about how you collect, store and use their personal information.
Therefore, you will also need a privacy policy incorporated through reference in your terms and conditions for digital products.
10. Updates & changes
The last essential term specifically needed in terms and conditions for digital products is updates and changes to your digital products. From time to time, you may update your digital products.
To prevent misunderstandings and claims, you must be clear about when you make updates and whether your customers will get access to the new content.
Think about whether or not your customers will be entitled to receive updates. If your customers have paid a low price for high-value content that is only relevant for this year but not next year, do your customers deserve to receive the updated version that is relevant next year?
If you feel like your customers should pay for the digital content of next year, you need to make that clear in your terms of use for digital downloads, so your customers understand that they are not entitled to the new version for free but will have to pay for the next version.
This is why you need all these crucial elements in your terms and conditions for digital products, not only to ensure you get paid what you deserve but also to protect your hard-earned cash and your business’ reputation.
Digital item policy template
If you want a digital item policy template containing all the essentials I just discussed, my terms and conditions for digital products have all of them and more!
My template is fully customizable for your specific digital products and your (business) needs. You can purchase your terms and conditions for digital products on this page of my contract shop.
Terms and conditions for website
If you have a website, you also need terms and conditions for website use, a privacy policy and disclaimers for the website itself. You can purchase my entire website bundle on this page of my contract shop!
This post was all about the essentials your terms and conditions for digital products must have to protect your content & your money.
You can get your terms and conditions for digital products on this page of my contract shop!
Do you have an online course? Then you need online course terms and conditions. Read about all you need in this blog post on the 11 Essentials All Course Terms and Conditions Must Have for Course Creators.
You can get my Online Course Terms and Conditions on this page of my contract shop!
