Custom Terms and Conditions for Online Businesses in Canada

Terms and Conditions are one of the main contracts governing the relationship between an online business and its customers or users.

For an e-commerce store, SaaS platform, mobile application, marketplace, membership business or other digital service, the terms can determine what the customer is purchasing, when payment is due, what happens if something goes wrong, how subscriptions can be cancelled, who owns content and intellectual property, what users are prohibited from doing, and how legal risk is allocated between the parties.

I’m Raz Toor, the founder of Falcon Law PC. A significant part of our business-law practice involves advising e-commerce companies, technology businesses, SaaS platforms, marketplaces and app-based businesses on their customer-facing contracts, privacy documentation and broader commercial structure.

One of the biggest mistakes I see is treating Terms and Conditions as a document that can simply be copied from another website. Good online terms should reflect how the business actually works.

Terms and Conditions, Terms of Use and Terms of Service: What’s the Difference?

These expressions are often used interchangeably.

The appropriate title is less important than what the agreement actually says.

Generally:

• Terms and Conditions is a broad expression commonly used for e-commerce businesses and websites;
• Terms of Service is frequently used for SaaS platforms, apps, subscription services and technology products; and
• Terms of Use often focuses on the conditions governing access to and use of a website or platform.

A business may sometimes use more than one document. For example, a marketplace may have customer Terms and Conditions, separate seller agreements and a Privacy Policy.

The important question is not what the document is called. It is whether the legal framework accurately reflects the transaction between the business and its users.

Who Needs Custom Terms and Conditions?

Custom terms can be particularly important for:

• e-commerce stores;
• SaaS businesses;
• mobile applications;
• subscription services;
• online marketplaces;
• booking platforms;
• membership websites;
• online education businesses;
• digital-product businesses;
• AI-enabled platforms;
• financial or analytical tools;
• professional-service platforms;
• content platforms;
• business directories;
• online communities; and
• other businesses that allow customers to purchase, subscribe, create accounts or interact with a digital service.

The more functionality the business provides, the less useful a generic template usually becomes.

Why I Would Not Simply Copy Another Company’s Terms

Using a competitor’s Terms of Service as a template can be tempting, especially for an early-stage business.

The problem is that the other company’s terms may have been drafted around a completely different:

• corporate structure;
• jurisdiction;
• business model;
• payment flow;
• subscription model;
• refund policy;
• technology stack;
• privacy framework;
• marketplace structure;
• risk profile; or
• customer base.

It may also contain protections the other business does not actually have the legal right to enforce.

A U.S. company’s website terms, for example, may include consumer waivers, arbitration provisions, liability exclusions or privacy language that should not simply be transplanted into a Canadian business.

The First Step Is Understanding How the Business Actually Works

Before drafting Terms and Conditions, I generally want to understand the customer journey.

That includes questions such as:

• What exactly is the customer purchasing?
• Is it a product, service, licence, subscription or marketplace transaction?
• Does the customer create an account?
• Who processes payment?
• Is the business charging once or on a recurring basis?
• Are there free trials?
• Does a subscription renew automatically?
• What happens when the subscription ends?
• Does the user upload content?
• Does the platform generate reports or analytics?
• Does the platform use AI?
• Does it connect to third-party accounts or APIs?
• Does the company sell its own products or facilitate sales by third parties?
• Who handles shipping?
• Who bears the risk of damaged products?
• What refund and cancellation rights exist?
• Which countries are customers located in?

Those operational facts drive the contract.

Make Sure the Correct Legal Entity Is the Contracting Party

This sounds basic, but it is important.

If the website uses a brand name but the business is operated by a corporation, the Terms should normally identify the corporation that is actually contracting with the customer.

For example, the Terms might explain that the service is operated by ABC Technologies Inc., doing business as a particular brand.

I generally want this to align with:

• the payment processor;
• invoices and receipts;
• the website;
• app-store accounts;
• the Privacy Policy;
• customer support communications;
• business registrations; and
• other commercial agreements.

The business should not leave the customer guessing which company they contracted with.

How Does the Customer Actually Agree to the Terms?

Drafting strong Terms and Conditions is only part of the exercise. The business should also consider how the customer accepts them.

Ontario’s Electronic Commerce Act, 2000 expressly recognizes that contracts can be formed electronically and that acceptance can occur through an electronic action such as clicking an appropriate icon or location on a computer screen.

From a practical perspective, I generally prefer a clear acceptance process where the user is presented with a conspicuous link to the Terms and takes an affirmative step indicating agreement.

For example:

“By creating an account, you agree to our Terms of Service and Privacy Policy.”

Depending on the circumstances, an unchecked box requiring affirmative acceptance may provide stronger evidence of agreement than simply placing a Terms link somewhere in the website footer.

The business should also consider keeping records showing:

• which version of the Terms applied;
• when the user accepted them;
• how acceptance occurred; and
• what changes were later made.

The Checkout Page Matters as Much as the Terms

The Terms cannot fix an inaccurate or misleading checkout process.

For example, if the Terms say that a subscription automatically renews but the checkout page does not clearly communicate the renewal structure, the business may still have a problem.

Similarly, a business should not hide important charges, restrictions or cancellation terms in a long legal document while presenting a materially different impression during checkout.

The contract and the customer interface should tell the same story.

Ontario Consumer Protection Rules Can Apply to Online Transactions

An online business selling to Ontario consumers should consider Ontario consumer-protection requirements.

Under Ontario’s current Consumer Protection Act, 2002, special rules apply to certain internet agreements where the consumer’s payment obligation exceeds the prescribed threshold.

Among other requirements, the supplier must provide prescribed information before the consumer enters into the agreement and provide the consumer with an express opportunity to accept or decline the agreement and correct errors immediately before entering into it.

The consumer must also receive a written copy of the internet agreement within the required period.

The legislation can provide cancellation rights where the statutory requirements are not followed.

This is one reason I would not approach an online Terms and Conditions project solely as a limitation-of-liability exercise.

Product and Service Descriptions

The Terms should clearly explain what the business provides.

That can be particularly important for technology companies because marketing language can easily create expectations that the product does more than the company intends to promise.

A Terms of Service document may need to distinguish between:

• information and professional advice;
• analytics and recommendations;
• organizational tools and official records;
• automated outputs and independently verified information;
• marketplace facilitation and actual sale of goods;
• estimated results and guaranteed outcomes; and
• platform functionality and third-party services.

The more reliance users may place on the platform, the more important this distinction becomes.

Subscriptions and Recurring Billing

Subscription businesses need particularly clear terms.

The agreement and checkout process should address:

• subscription price;
• billing period;
• currency;
• taxes;
• when payment is taken;
• automatic renewal;
• free trials;
• promotional pricing;
• price changes;
• cancellation;
• refunds;
• failed payments;
• downgrades;
• upgrades;
• what happens after expiry; and
• whether customer data remains accessible after cancellation.

For an app sold through Apple or Google, the agreement should also account for the fact that the marketplace may control payment processing, renewals and certain refund procedures.

Cancellation and Refund Policies

A refund policy should reflect the actual product.

The issues for physical products are different from those for:

• digital downloads;
• subscriptions;
• professional services;
• custom products;
• marketplace transactions;
• event bookings; and
• software licences.

The business should determine when refunds are permitted and who has authority to issue them.

Any contractual restriction should remain subject to consumer rights that cannot legally be waived.

Shipping, Delivery and Risk of Loss

For e-commerce businesses selling physical goods, the Terms may need to address:

• shipping costs;
• estimated delivery times;
• carrier delays;
• lost shipments;
• damaged shipments;
• incorrect addresses;
• failed delivery attempts;
• international shipping;
• customs duties;
• import charges;
• returns;
• exchanges;
• product defects; and
• when responsibility for the goods changes hands.

These issues become more complicated in a marketplace or dropshipping arrangement because the business interacting with the customer may not physically hold or ship the product.

Marketplaces Need More Than Ordinary E-Commerce Terms

A marketplace has at least three relationships to think about:

• the platform and the customer;
• the platform and the seller or vendor; and
• the seller and the customer.

The documentation needs to reflect how those relationships actually operate.

For example, the platform may need to address:

• whether it is acting as seller, agent, intermediary or marketplace operator;
• who determines pricing;
• who collects payment;
• how commissions are calculated;
• when vendors are paid;
• who handles chargebacks;
• who bears the cost of returns;
• who is responsible for product defects;
• who communicates with customers;
• who handles shipping;
• who owns inventory;
• what happens when a seller does not fulfil an order; and
• how customer complaints are resolved.

The customer-facing Terms should be consistent with the separate vendor or seller agreement.

User Accounts and Account Security

Where a platform allows users to create accounts, the Terms may address:

• eligibility;
• accurate registration information;
• password security;
• multi-factor authentication;
• unauthorized access;
• account sharing;
• account recovery;
• fraudulent activity;
• suspension;
• termination; and
• account deletion.

If losing access to the account could also mean losing access to important user data, the contract should explain the consequences clearly.

User-Generated Content

Apps and platforms frequently allow users to upload:

• photographs;
• videos;
• documents;
• comments;
• reviews;
• records;
• journal entries;
• profiles; or
• other content.

The Terms should determine what rights remain with the user and what limited licence the company requires to host, process, display, transmit or otherwise operate the service.

A company does not necessarily need to claim ownership of everything a customer uploads.

In many cases, what it really needs is a licence sufficiently broad to operate the platform.

Intellectual Property

The Terms should distinguish between the company’s intellectual property and the user’s content.

The company’s rights may include:

• software;
• source code;
• interface design;
• branding;
• logos;
• databases;
• proprietary methodologies;
• documentation;
• reports;
• graphics; and
• other platform materials.

Users may be granted a limited right to access or use that material for the purpose contemplated by the service.

The Terms may also prohibit unauthorized copying, scraping, reverse engineering or commercial reuse, subject to rights that applicable law does not permit the business to exclude.

AI-Enabled Features Require Their Own Analysis

Businesses are increasingly adding AI-generated summaries, recommendations, analytics and other outputs.

Simply adding a broad “AI disclaimer” is not always enough.

Depending on the product, the Terms should consider:

• what the AI feature actually does;
• what information is sent to an AI provider;
• whether user information is used to train models;
• whether outputs may be inaccurate;
• whether outputs require independent verification;
• whether users should rely on outputs for high-impact decisions;
• ownership and licensing of inputs and outputs;
• third-party model availability;
• changes to the underlying model; and
• the limits of the company’s obligations to monitor or correct generated outputs.

The platform’s Privacy Policy also needs to accurately disclose relevant information flows.

Third-Party Integrations

Many online businesses are built on third-party services.

Examples include:

• Stripe;
• Shopify;
• Apple;
• Google;
• cloud infrastructure;
• analytics providers;
• AI providers;
• brokerage integrations;
• email platforms;
• shipping providers;
• authentication services; and
• other APIs.

The Terms should not promise that a third-party integration will always be available if the business does not control that service.

The agreement may also need to explain that third-party services are subject to their own terms and that some platform functionality depends on them.

Acceptable Use Rules

Online platforms should generally establish basic rules governing misuse.

Depending on the service, prohibited conduct might include:

• illegal activity;
• fraud;
• impersonation;
• unauthorized access;
• malware;
• scraping;
• interference with platform security;
• infringement of intellectual property;
• harassment;
• uploading information without authority;
• misleading or fabricated information;
• circumvention of usage limitations; and
• commercial exploitation outside the licence granted by the business.

The agreement should also explain what the company can reasonably do when those rules are violated.

Suspension and Termination Rights

A business should generally reserve the ability to suspend or terminate accounts in appropriate circumstances.

Those circumstances may include:

• non-payment;
• fraud;
• security threats;
• illegal activity;
• material violation of the Terms;
• abuse of other users;
• intellectual-property infringement;
• misuse of platform resources; or
• legal or regulatory requirements.

But suspension rights should be drafted proportionately.

A contract giving the business unlimited power to terminate every customer immediately for any reason may look protective, but it can create its own commercial and enforceability issues.

Disclaimers Should Be Specific to the Product

A generic disclaimer saying that everything is provided “as is” is rarely the most useful form of risk management.

The disclaimer should focus on what users might realistically misunderstand about the service.

For example:

• a financial analytics platform may need to make clear that it does not provide investment advice;
• a record-keeping platform may need to explain that user-created records are not independently verified official records;
• an AI service may need to warn that generated outputs can contain errors;
• a marketplace may need to explain the platform’s role in transactions involving third-party sellers; and
• a software platform may need to disclose that uninterrupted availability cannot be guaranteed.

The best disclaimer is usually tied directly to the foreseeable way someone might misuse or misunderstand the product.

Limitation of Liability

A well-drafted limitation-of-liability section can be important, particularly for SaaS and technology companies.

It may address:

• indirect or consequential losses;
• lost profits;
• loss of data;
• service interruptions;
• third-party services;
• user reliance;
• the aggregate liability cap; and
• exceptions that cannot legally be excluded.

However, a limitation clause is not a substitute for operating the business properly.

Terms should not be drafted on the assumption that the business can disclaim every legal obligation merely by putting enough capital letters in a contract.

Indemnification

An indemnification provision may protect the business from certain losses arising from wrongful conduct by a user.

For example, it may apply where the user:

• uploads infringing material;
• misuses another person’s information;
• violates the law;
• makes unauthorized representations;
• breaches specified user obligations; or
• causes a third-party claim through conduct for which the user is responsible.

I generally prefer an indemnity tied to identifiable risks rather than an extremely broad clause requiring the customer to indemnify the company for virtually anything that happens.

Terms and Conditions Are Not a Privacy Policy

Terms and Conditions govern the contractual relationship.

A Privacy Policy addresses how the business collects, uses, discloses, retains and otherwise handles personal information.

The two documents should work together, but they serve different purposes.

Businesses subject to Canada’s private-sector privacy laws need to consider their actual information-handling practices, not simply publish a privacy template.

The Office of the Privacy Commissioner of Canada emphasizes that organizations should have clear policies and procedures governing the collection, use and disclosure of personal information and remain accountable for the information under their control.

For more on this topic, see our guide on drafting a privacy policy for a Canadian business.

Email Marketing and CASL

An online business that sends promotional emails or other commercial electronic messages should also consider Canada’s Anti-Spam Legislation.

CASL generally requires businesses sending commercial electronic messages to address three core requirements:

• appropriate consent;
• required identification and contact information; and
• a functioning unsubscribe mechanism.

Consent management should be built into the actual marketing workflow rather than buried inside the Terms and Conditions.

For example, a checkbox accepting the Terms should not automatically be treated as permission to receive every future promotional email.

Cross-Border Customers

Many Canadian online businesses have customers outside Canada from the first day they launch.

That does not necessarily mean the Terms need a separate section for every country in the world.

However, the business should understand where its users are located and whether foreign consumer, privacy, tax or other mandatory laws may apply.

A governing-law clause selecting Ontario law is useful, but it does not necessarily eliminate mandatory legal rights granted to consumers in another jurisdiction.

For businesses deliberately targeting customers in the United States, Europe, the United Kingdom or other markets, additional jurisdiction-specific review may therefore be appropriate.

Terms for SaaS Businesses

SaaS agreements often require additional provisions concerning:

• service availability;
• subscriptions;
• licence scope;
• authorized users;
• usage limits;
• account administrators;
• data storage;
• customer content;
• integrations;
• service modifications;
• beta features;
• security;
• support;
• termination;
• data export; and
• what happens to customer information after termination.

For more detail, see our guide on key considerations when drafting a SaaS agreement.

Terms Should Match the Technical Product

This has become one of the most important parts of our work with technology businesses.

The lawyer cannot draft accurate terms based only on what the founder hopes the product will eventually do.

The documents should reflect the production version of the platform.

For example, if the Terms say:

• users can export their data;
• subscriptions are cancelled in a certain manner;
• information is deleted after a specific period;
• a particular feature does not share information with third parties;
• certain AI data is not retained; or
• a service is available in a specific jurisdiction,

the product should actually work that way.

Legal drafting and product implementation should be reconciled before launch.

What We Have Been Working On With Online Businesses in 2026

Our recent work illustrates how different online Terms of Service can be from one business to another.

In one 2026 matter, we prepared Terms of Service and privacy documentation for a Canadian trading analytics and journaling platform intended for users in Canada and international markets. The platform involved brokerage integrations, user-created trading journals, derived analytics, subscription features and AI functionality.

The Terms therefore needed to address much more than basic website access. The work included user responsibility for trading decisions, limitations on reliance on analytics and AI-generated information, third-party brokerage integrations, account security, subscription matters, intellectual property and the distinction between an analytical tool and financial or investment advice.

We separately reviewed the associated privacy architecture because the platform handles potentially sensitive trading and financial information and transmits certain information to third-party technology providers. :chatgpt-content-reference{index=”0″}

In another 2026 matter, we revised the Terms of Service and Privacy Policy for a subscription-based mobile application used to maintain service-dog-related records. The app allowed users to create profiles, maintain training and expense records, generate reports and store other information through a paid app-store subscription.

That agreement required very different protections. We addressed the distinction between user-created records and official certification, subscription renewals and cancellations, user-generated content, account deletion, sensitive information, marketplace billing, limitations on reliance and the responsibilities associated with users entering information about third parties. :chatgpt-content-reference{index=”1″}

We have also recently advised on the legal framework for an international curated e-commerce marketplace involving products supplied by independent artisans. The proposed structure required careful consideration of who the legal seller would be, how customer payments and vendor settlements would flow, commissions, shipping, customs, damaged goods, returns, chargebacks and customer complaints. :chatgpt-content-reference{index=”2″}

Those three businesses all operate online, but giving each of them substantially the same Terms and Conditions would make little sense.

The examples above have been anonymized and certain details have been generalized to protect client confidentiality.

A Practical Terms and Conditions Checklist

When we prepare or review online Terms and Conditions, the issues I consider can include:

• correct contracting entity;
• electronic acceptance;
• eligibility;
• account registration;
• account security;
• description of the service;
• product descriptions;
• pricing and currency;
• taxes;
• payment processing;
• subscriptions;
• automatic renewals;
• free trials;
• cancellation;
• refunds;
• shipping and delivery;
• returns;
• chargebacks;
• user-generated content;
• intellectual property;
• acceptable use;
• third-party services;
• AI functionality;
• disclaimers;
• limitations of liability;
• indemnification;
• suspension;
• termination;
• data export;
• account deletion;
• governing law;
• dispute provisions;
• consumer protection;
• changes to the Terms; and
• how the Terms interact with the Privacy Policy and other agreements.

When Should the Terms Be Updated?

Terms and Conditions should not necessarily remain unchanged for the life of the company.

I would consider another legal review where the business:

• introduces subscriptions;
• changes its pricing model;
• adds AI functionality;
• starts accepting user-generated content;
• launches a marketplace;
• adds international markets;
• changes payment processors;
• introduces a mobile app;
• adds significant third-party integrations;
• changes refund or cancellation policies;
• starts selling a materially different product or service;
• changes the contracting corporation; or
• experiences recurring customer disputes that reveal a gap in the existing agreement.

Custom Terms Should Protect the Business Without Making the Product Unusable

A Terms of Service document is not better simply because it is longer or more aggressive.

The objective is to identify the actual commercial risks and allocate them clearly.

For many online businesses, that means clearly explaining:

• what the company promises;
• what it does not promise;
• what the customer must do;
• how payment works;
• what happens when the relationship ends;
• which risks are outside the company’s control; and
• what remedies are available when something goes wrong.

That is considerably more useful than filling a document with generic legal language copied from another platform.

How Falcon Law PC Can Help

Falcon Law PC assists e-commerce businesses, SaaS companies, mobile applications, online marketplaces and other technology-driven businesses with custom Terms and Conditions, Terms of Service, privacy policies, commercial contracts and broader corporate matters.

You can learn more about our E-Commerce & Online Business legal services.

If you already have Terms and Conditions or another commercial agreement that you would like reviewed, you can also QuickStart a contract review online.

When preparing Terms for a new online business, I generally recommend providing the lawyer with a practical explanation of the customer journey, screenshots or access to the product where available, payment and subscription details, refund policies, third-party integrations and information about the jurisdictions being targeted. The closer the legal documents are to the way the business actually operates, the more useful they become.

This article is intended for general informational purposes only and does not constitute legal, privacy, tax, accounting or regulatory advice. Applicable requirements depend on the business model, customer location, transaction structure, technology and individual circumstances.