If you're building a SaaS company, chances are your focus is on product, scalability, and shipping fast. Legal documents? They often fall to the bottom of the list.
But ignoring them, especially the foundational ones, can introduce risk and erode trust just when you’re starting to gain traction. Terms of Use, Terms and Conditions, and Privacy Policy are essential infrastructure for any SaaS business.
At a basic level, these agreements shape the relationship between you and your users. They define what people can expect from your service, what you expect in return, and what happens when things go wrong. More than that, they help you set boundaries, allocate risk, and comply with laws that apply the moment you start collecting data or charging customers.
Let’s break down the three big ones:
1 Terms of Use
Like a rulebook, ToU/ToS lay out what users can and cannot do on your platform. They give you the right to suspend or remove accounts for misuse, limit your liability when users act in ways you can’t control, and protect your service from abuse.
2 Terms and Conditions
While Terms of Use are about behavior, T&Cs focus on the business side, i.e: your pricing, billing cycles, refund policies, and cancellation terms. This is the contract that governs your commercial relationship with customers.
3 Privacy Policy
This one isn’t optional. Nearly every jurisdiction now requires companies to disclose how they collect, store, and use personal data. Your Privacy Policy is your public-facing commitment to your users about how you handle their information.
Common Missteps
One of the most common missteps is copy-pasting legal terms from another company’s website, assuming they’ll apply to your product. In reality, even minor differences like what data you collect or the jurisdictions you operate in can completely change what your terms need to say.
Another mistake is treating legal documents as static. As your product evolves, your agreements should too. If you introduce new features, change your pricing model, or expand internationally, those changes should be reflected in your Terms and Privacy Policy.
The Bottom Line
Your legal agreements don’t need to be scary or perfect from day one. But they do need to be intentional. They shape how you handle risk, how you build trust, and how well your product can scale without legal headaches down the line.