Privacy Policy vs. Terms and Conditions: What are they?
While browsing competitors, you are highly likely to encounter two titles in the footer of their websites that might seem unrelated: one stating “Privacy Policy,” and the other titled the mysterious “Terms and Conditions.” Without a legal background, it can be difficult to understand their purpose or whether your website needs them.
If this description feels familiar, this overview is for you. This guide explains the key differences between terms and conditions and a privacy policy, what each includes, and how to create compliant versions for your business.
Key takeaways
- Key comparisons: Learn the main differences between these essential website legal documents.
- Purpose and enforcement: A privacy policy covers data handling and is often legally required; terms and conditions set usage rules and are contractually enforceable.
- Legal requirements: When a privacy policy is mandatory for GDPR/CCPA compliance and why terms and conditions are strongly recommended.
- Content overview: What each document typically includes — from data collection and storage to user conduct and liability.
- Generating documents: Steps to create both documents tailored to your business.
- Display locations: Where to display your legal pages for accessibility and compliance.
- Common mistakes to avoid: Avoid using generic templates or neglecting regular updates.
- Combined approach: Keep privacy policies and terms separate but cross-referenced.
What is a privacy policy?
A privacy policy is a legal document that explains how your website collects, processes, and protects personal data. Other possible terms for this document include privacy notice, customer privacy policy, data privacy policy, or company privacy policy.
Typically, a privacy policy provides details on:
- The types of data being collected
- The purposes for which this data is collected and processed
- The data storage and protection terms
- Whether third parties are involved and how the data is shared with them
- User rights under applicable privacy laws and how to exercise them
Why add a privacy policy?
Having a privacy policy on your website is both a legal requirement and a best practice for data protection. If your website collects any personal information, like names, payment details, email addresses, IP addresses, or cookies, you need to have a clear and comprehensive privacy policy.
Learn how to write a privacy policy customized for your business, in straightforward 12 steps.
Generally, privacy policies are required by:
- Major regulations like the GDPR in Europe and the CCPA in California
- Advertising platforms and marketplaces, including Google, Meta, and Amazon
- App stores that mandate privacy disclosures for mobile apps, including Apple’s App Store and Google Play
If your website activity falls under the requirements of these regulations and partner platform policies, it needs a privacy policy to meet regulatory requirements for notifying the individuals whose data you’re accessing.
You may be exempt only if your website is completely static and collects no personal data. Even if you don’t need prior consent to collect and process data, you still need a privacy policy.
Is a privacy policy a contract?
While a privacy policy supports compliance with privacy laws, its primary purpose is to build trust by explaining data practices transparently. It’s dedicated to protecting user rights, because it is where companies openly communicate their data practices, demonstrate accountability, and enable individuals to exercise their rights.
What is a terms and conditions agreement?
Terms and conditions constitutes a legally binding agreement between a service provider — meaning the website or app owner — and its users. You may also see them referred to as Terms of Use, Terms of Sale, Conditions of Use, or Terms of Service.
This document details the rules, responsibilities, and expectations regarding user access and use of the service or product to which it refers. It serves as a contract outlining terms of use, limiting liability, and protecting intellectual property.
Learn more about the nuances of Terms of Use, Terms of Service, and Terms and Conditions.
Typically, terms and conditions cover:
- Rules and expectations for user behavior
- Terms of product sale, which may include payment methods, subscription terms, and a shipping policy
- Refund conditions, such as a 30-day money-back guarantee
- Rights and responsibilities of the service provider, including the limitation of liability and the ‘all sales are final’ policy, if relevant
- Website disclaimers and copyright notice on intellectual property (IP) rights
Who needs terms and conditions?
While not always legally required, a terms and conditions document helps to define the ground rules and obligations that users agree to while interacting with a product, service, or platform. If your business offers products, services, or a platform for users, you should have clear terms and conditions.
Similar to a privacy policy, the main goal is to nurture trust by preventing misunderstandings, protecting both parties legally, and providing a framework for resolving disputes.
Privacy Policy vs. Terms and Conditions: key differences
While some website owners tend to see no differences between a terms and conditions user agreement and a privacy policy, these documents have clear distinctions regarding rules for user behavior, liability limits, IP rights, and more.
Explore these differences in more detail in the table below.
| Aspect | Privacy Policy | Terms and Conditions |
| Purpose | Explains how businesses collect, share, use, and protect users’ personal data | Sets rules for website/service usage, including company obligations and user responsibilities |
| Legal requirement | Legally required in many jurisdictions for businesses that collect personal data | Not legally required but strongly recommended; once in place, they are legally binding |
| Enforcement | Enforced by various entities depending on jurisdiction and applicable privacy laws, with potential fines and legal consequences | Enforced contractually by the company, including via actions like account suspension and termination |
| Focus | Data use transparency, user privacy rights, compliance with data privacy laws | Usage permissions, user behavior rules, service limitations |
| User behavior rules | No conduct rules beyond those related to data use | Detailed rules on accepted use, prohibited activities, and user responsibilities |
| Liability limits | Related to data breaches and misuse | Detailed limits of company liability for service interruptions, content, and damages |
| Intellectual property (IP) rights | Not covered unless related to user data or consent | Clearly stated ownership of website content, trademarks, copyrights, and user-generated content rights |
| Content examples | Types of data collected, information about third-party sharing, cookies, security measures | Account terms, conduct rules, information about payment, IP rights, refunds |
| User impact | Informs users about how their data is handled and their related rights | Establishes conditions and obligations under which users can access and use the service |
Website privacy policy and terms of use: Do you need both?
Most websites need both a privacy policy and terms and conditions, as each serves a distinct purpose. Still, whether you need these documents depends on your website’s specific purpose and functions, and legal requirements applicable to your business.
Why you may need a privacy policy:
- Websites that collect any personal data from users — including names, emails, and payment information — are legally required to have a privacy policy
- It supports compliance with data privacy regulations like the GDPR and the CCPA
- It fosters user trust by informing individuals about how their personal data is collected, shared, used, and secured
Why you may need terms and conditions:
- It’s a way to proactively set rules for website or service use, account policies, and user responsibilities
- It helps you limit your liability and protect intellectual property
- It makes rules for monetary transactions more transparent
You may need both terms of use and a privacy policy if you:
- Ask users to share personal information while signing up for a membership or services
- Sell products or services
- Collect personal data for other purposes relating to site usage
- Want to define your website’s usage rules proactively
- Value legal compliance
- Want to build trust with your website users
How to generate a privacy policy and terms and conditions for your website
You can reference examples from other businesses, but tailor your privacy policy and terms and conditions to your operations and applicable laws. And remember that it’s also important and legally required to keep these documents up to date.
To draft your own, follow the steps below.
How to generate a privacy policy
- Identify all personal data you collect and process.
- Familiarize yourself with relevant data privacy laws, focusing on where your customers/users are located.
- Understand in clear terms and document:
- What data you collect and how it’s used
- Data sharing policies with third parties
- Any data protection and security measures you apply
- Individuals’ rights granted by data protection laws and how you respond when they’re exercised
- Include terms of cookie usage and data management policies.
- Add contact information for privacy concerns and data requests.
- Consult with a legal expert and publish the document on your website.
- Review and update regularly to maintain accuracy and legal compliance as business operations, technologies in use, and laws change.
How to generate your Terms of Service
- Understand your business needs, which may include payment terms, refunds, user responsibilities, IP rights, and limitations of liability.
- Determine applicable legal requirements for your business and website.
- Gather the following details and draft them into clear, user-friendly clauses:
- Contact information (postal address, email, phone)
- Relevant data use disclosures specific to your business
- Shipping policy, registration flow, and other terms that have certain user behavior expectations
- Terms of potential monetary disputes, including refund and cancellation policies
- Dispute resolution procedures
- Outline your agreement with an introduction, information on acceptance, user conduct, payment/refund policy, intellectual property, termination, and governing law.
- Determine a schedule and process for updating the document.
- Obtain legal advice and revise for clarity and compliance.
- Publish your Terms and Conditions prominently on your site so users can easily make their choice.
Use our ready-made Terms of Service template to make your own agreement.
Where to display your privacy policy and terms and conditions website pages
Both your terms and conditions and privacy policy should be clearly visible and approachable for website users at any time.
Display links to your privacy policy and terms and conditions where users can easily find them, such as the website footer, sign-up forms, checkout pages, and cookie banners. Some other possible locations include:
- Contact forms
- Email newsletter subscription forms
- Within relevant legal documents (frequently, there is a link to the privacy policy in the terms and conditions document)
When it comes to marketing data privacy, clear and consistent links to a privacy policy and terms and conditions are among best SEO practices, as showcasing transparency and trustworthiness contributes to a better website ranking.
Terms and conditions vs. privacy policy: Common mistakes businesses make
In addition to underestimating their importance and confusing the documents with one another, here are the most common problems businesses encounter when writing a privacy policy or a terms of use agreement:
- Overreliance on AI tools: Depending only on AI tools for legal policies without expert review can lead to incomplete, outdated, legally invalid, or even nonsensical content.
- Copying templates without customization: Copying legal documents directly from other companies’ websites — even those with comparable businesses, like competitors — can result in inaccurate information, failing to address legal requirements and misleading users, resulting in a violation of their trust.
- Using vague or overly technical language: Writing policies with generalized information or overly technical or legal jargon can alienate users and reduce transparency.
- Misrepresenting data practices: Hiding and misrepresenting privacy policies, including via a lack of transparency about third parties, can lead to regulatory penalties and reputational damage.
- Failing to update documents regularly: Your privacy policy and terms and conditions should be updated as soon as laws, business practices, or data collection methods change to prevent misinformation and noncompliance.
A reliable terms and conditions agreement and privacy policy means collecting the right information and performing ongoing maintenance. There are tools to help manage the workload, like the automatic privacy policy generator from Usercentrics. It helps you keep up with changing requirements, build trust with your users, and stay confident in your data privacy protection efforts.