What Is The Difference Between Terms Of Use And Terms & Conditions? (2026 Updated)

If you run a website, app, or online store, you’ve probably seen businesses link to both “Terms of Use” and “Terms & Conditions” (sometimes plus a Privacy Policy) in the footer.

It’s easy to assume they’re the same thing with different names. But in practice, they can serve different purposes depending on what you do, who your users are, and what you’re trying to protect.

This guide is updated for current expectations around online business operations and risk management, so you can confidently set up your legal foundations from day one.

Are “Terms Of Use” And “Terms & Conditions” Actually Different In New Zealand?

In New Zealand, there isn’t one official rule that says your document must be called “Terms of Use” or “Terms & Conditions”.

Most of the time, the difference is about context and scope, not about a strict legal category.

In plain terms:

• Terms of Use usually relates to how people can use your website, platform, or app (especially if users are “using” a service, browsing content, posting, or creating accounts).
• Terms & Conditions often relates to broader commercial rules (especially where you’re selling goods/services, taking payments, shipping, subscriptions, or setting refund policies).

That said, many businesses combine everything into a single document and call it one of the above. That can be perfectly fine if it’s drafted well and covers what you actually do.

The bigger risk isn’t the title. It’s having terms that are:

• missing key protections (so you’re exposed when something goes wrong);
• not enforceable (for example, because the customer never agreed to them properly); or
• out of sync with what you actually promise on your website (which can create compliance issues).

What Does “Terms Of Use” Usually Cover?

Think of Terms of Use as the “rules of the road” for anyone accessing your online space.

If you run a content-based website, a SaaS platform, a marketplace, or any service where users interact (even just by browsing), Terms of Use are often the document that sets expectations and limits your liability.

Common Clauses In Terms Of Use

Terms of Use often include:

• Account rules (eligibility, sign-up requirements, keeping passwords secure, suspending or terminating accounts).
• Acceptable behaviour (no harassment, spam, hacking, uploading illegal content, or misusing the platform).
• Intellectual property (IP) (who owns your content and branding, and what permission users have to view/use it).
• User-generated content rules (who owns what users post, what licence they grant you, takedown rights).
• Disclaimer of warranties (for example, that the site is provided “as is” and may have interruptions).
• Limitation of liability (setting boundaries around what you’re responsible for, within what NZ law allows).
• Links to third-party sites (making it clear you’re not responsible for third-party content).
• Changes to the site (your ability to update features, suspend services, or modify content).
• Governing law (typically New Zealand law, and any jurisdiction wording).

When Terms Of Use Are Especially Important

Terms of Use are particularly relevant if you’re running:

• a platform where users can post content or reviews;
• a membership site (free or paid);
• a service where people interact with each other (messages, bookings, profiles);
• an app or SaaS tool;
• a blog or informational website where people may rely on information.

For many digital businesses, your Terms of Use sits alongside documents like a Terms of Use page, and your Privacy Policy (more on that below).

What Do “Terms & Conditions” Usually Cover?

Terms & Conditions (often called “T&Cs”) usually deal with the transactional side of your business. In other words: when money changes hands, what are the rules?

If you sell products or services, your Terms & Conditions can be one of your strongest tools for reducing misunderstandings and protecting your cashflow.

Common Clauses In Terms & Conditions

Terms & Conditions often cover things like:

• Pricing and payments (when payment is due, payment methods, late fees, deposits, and invoicing rules).
• Order process (how orders are placed, accepted, and confirmed).
• Delivery and shipping (timeframes, risk transfer, delivery failures, authority to leave parcels).
• Returns and refunds (how you handle change-of-mind returns vs faulty products, and how processes work).
• Subscription rules (billing cycles, renewals, cancellations, free trials).
• Service scope (what’s included, what isn’t, and how variations are handled).
• Intellectual property and licensing (especially if you’re delivering digital products).
• Limitation of liability (again, within the boundaries of NZ law).
• Dispute resolution (how complaints are handled, escalation processes, and possible mediation pathways).

For online stores, these are often implemented as Online Shop Terms & Conditions that customers agree to at checkout.

Don’t Forget NZ Consumer Law

In New Zealand, you can’t “contract out” of key consumer rights in most consumer sales. That means your Terms & Conditions must be written carefully so they don’t:

• promise something you can’t deliver; or
• try to remove rights customers have under law.

In particular, your advertising and sales practices need to align with the Fair Trading Act 1986 (for misleading or deceptive conduct), and consumer guarantees under the Consumer Guarantees Act 1993 when you’re selling to consumers.

As a practical example: if your website says “no refunds under any circumstances”, but you sell products that might be faulty, that statement may create legal risk and customer disputes.

Having clear processes helps too, like spelling out returns steps in your returns and refunds approach so your customer support team is consistent.

Which One Do You Need For Your Business (And Can You Combine Them)?

Whether you need Terms of Use, Terms & Conditions, or both depends on what your business does.

Here are common setups we see for NZ businesses.

If You Have An Informational Website (No Accounts, No Sales)

If people are just reading your content (for example, a blog, portfolio site, or lead generation website), you may be fine with a well-drafted Terms of Use document that covers:

• your IP and branding ownership;
• a liability disclaimer (especially if you share educational content); and
• rules around acceptable use (e.g. no scraping or misuse).

If you collect personal information (like newsletter sign-ups or enquiry forms), you’ll also want a Privacy Policy.

If You Sell Products Online (Ecommerce)

If you run an online store, your Terms & Conditions are usually the priority because they should align with how you take orders, get paid, ship items, and handle returns.

You might still include “Terms of Use” content within the same document, but many ecommerce businesses just publish one combined set of T&Cs that includes usage rules and sale terms.

If You Run A Platform, App, Or SaaS Product

SaaS businesses often need both:

• Terms of Use to govern platform access, accounts, and misuse; and
• commercial/service terms for payment, subscription renewals, service levels, and liability allocation.

Depending on your setup, you might formalise your service delivery in a Service Level Agreement, especially if you’re selling to other businesses that require uptime commitments and clearer performance standards.

If You Provide Services (Online Or Offline)

If you’re selling services (consulting, marketing, trades, design, coaching), your T&Cs (or service agreement) should be doing the heavy lifting by clarifying:

• scope of work and deliverables;
• payment terms (including late payment consequences);
• variations and out-of-scope work; and
• what happens if a party wants to end the arrangement early.

In many service businesses, the “Terms of Use” label is less common, and “Terms & Conditions” or a contract-style document makes more sense.

Yes, You Can Combine Them (If You Do It Properly)

Plenty of businesses use one document labelled “Terms & Conditions” that includes website use rules plus sale/service terms.

The key is to make sure it’s written to match your reality. Generic templates often miss important details like subscription renewals, delivery risk, or how disputes are handled.

How Do You Make These Terms Enforceable Online?

Even perfectly written terms won’t help much if users never properly agree to them.

In an online context, enforceability usually comes down to notice and consent.

Use “Clickwrap” Where Possible

Clickwrap is where the user has to actively click “I agree” (for example at checkout or sign-up) and the terms are linked right there.

This is usually stronger than simply placing a link in your footer and hoping that counts as agreement.

Make The Terms Easy To Find And Read

Good practice includes:

• linking the terms in your footer;
• linking them at checkout/sign-up;
• using clear headings and plain language; and
• avoiding hidden clauses or unexpected fees.

This isn’t just about legal enforceability. It’s also about trust. Clear terms reduce customer complaints and chargebacks.

Be Careful With “Unfair” Terms

Some terms can create risk if they’re overly one-sided or inconsistent with how you actually operate.

For example, if your terms say you can cancel any order “at any time for any reason” after taking payment, but you don’t disclose that clearly during purchase, you can end up with disputes and reputational issues.

When in doubt, the goal is clarity and fairness while still protecting your business.

Keep Your Terms Updated (But Don’t “Move The Goalposts”)

Most online businesses will update their terms from time to time. That’s normal.

However, the safer approach is to:

• state how you will notify users of changes (especially for ongoing subscriptions);
• keep version control (date the terms); and
• avoid changes that retroactively disadvantage customers without notice.

If you’re changing pricing, renewal terms, or key service features, it’s worth getting tailored legal advice on the rollout so you don’t accidentally create compliance headaches.

What Else Should You Have Alongside Your Terms?

Terms of Use and Terms & Conditions are a big part of your legal foundations, but they don’t cover everything.

Depending on what you’re doing, you may also need additional documents and processes to stay protected as you grow.

Privacy Compliance (Almost Always Relevant)

If you collect personal information (names, emails, addresses, IP addresses, analytics identifiers, payment details, customer notes), you need to think about privacy compliance under the Privacy Act 2020.

That usually means having a clear Privacy Policy that matches what you actually do, and ensuring you have practical systems to handle things like access requests and data security.

Customer-Facing Disclosures And Policies

Your website wording often matters just as much as your legal terms.

If you sell online, you may also want supporting policies (which can be separate documents or built into your main terms), such as:

• shipping policy and delivery timeframes;
• returns process and exchanges; and
• complaints handling.

If you decide to use a stand-alone disclaimer for certain types of content (for example, educational material or calculators), a tailored Disclaimer can also help manage expectations.

Contracts Behind The Scenes (Suppliers, Contractors, Staff)

Online terms govern your relationship with users and customers, but they don’t automatically protect you in your internal operations.

As soon as you start hiring or outsourcing, consider your other legal foundations:

• When you hire staff, you’ll generally want a proper Employment Contract and clear policies (especially around privacy and IT systems).
• When you engage contractors, you’ll usually want a written contractor agreement that deals with deliverables, IP ownership, and confidentiality.

This is one of those “it’s easy to ignore until there’s a problem” areas. Getting it in place early can save you a lot of time and cost later.

Brand Protection

Your terms might say “we own our branding”, but that statement doesn’t stop someone else from registering a similar brand name.

If you’re investing in a brand (name, logo, tagline), it can be worth looking at register your trade mark steps early, especially if you’re growing nationwide or investing in paid ads.

Key Takeaways

• In New Zealand, “Terms of Use” and “Terms & Conditions” aren’t strictly defined labels, but they usually refer to different scopes: site/platform use rules versus broader commercial and sales rules.
• Terms of Use typically cover accounts, acceptable behaviour, IP ownership, user content rules, disclaimers, and liability limitations for websites and platforms.
• Terms & Conditions usually focus on transactions, including payments, delivery, subscriptions, cancellations, and returns, and they should align with your obligations under NZ consumer laws like the Fair Trading Act 1986 and Consumer Guarantees Act 1993.
• You can combine Terms of Use and Terms & Conditions into one document, as long as it’s clear, tailored to your business, and actually matches what you do in practice.
• Enforceability matters: online terms should be properly presented and agreed to (for example, using clickwrap at checkout or sign-up) rather than being buried in a footer.
• Your terms work best alongside other legal foundations, such as a Privacy Policy under the Privacy Act 2020, internal contracts for staff and contractors, and (where relevant) trade mark protection.

If you’d like help getting the right Terms of Use or Terms & Conditions in place for your website, app, or online store, we’re happy to help. Contact Sprintlaw on 0800 002 184 or email team@sprintlaw.co.nz for a free, no-obligations chat.