What’s a subscription agreement? Here’s everything you need to know

Do you offer products or services on a subscription basis? If so, you’ll want to make sure you have a solid Subscription Agreement in place, it is a crucial legal document that sets out the terms and conditions for your subscription service, and it can help protect your business and more.

In this article, we’ll cover all you need to know about Master Subscription Agreements, including what they are, who needs them, what should be included, and how to display and create them. So let’s dive in!

Who Needs a Subscription Agreement?

While there is no legal requirement to have one, there are many important advantages to consider.

A Subscription Agreement ensures that your users are fully informed about what they should (and should not) do when using your service.

👉 This can help avoid misunderstandings and potential disputes down the line.

Another advantage of a subscription agreement is that you can limit your legal liability by including proper clauses.

👉 This can help protect your business from any legal issues that may arise.

In addition, you can use the agreement to communicate important information to your users so that they don’t have to contact you all the time with questions. 💡 For example, information on how to cancel subscriptions or update payment methods, making things easier for both you and your customers.

What Should Be Included in a Subscription Agreement?

As we have seen above, if you offer subscription services, it’s essential to have a Subscription Agreement that includes all the important information that users need to know and agree to before signing up.

Essentially, this agreement informs users of their rights and responsibilities when using your services, clarifies how you protect their personal information, and explains other critical details.

👉 So consider including the following clauses:

• User Requirements: This clause describes the user’s behavior when using the subscription service, including restrictions on use, and appropriate provisions for use of the service.
• Payment Details: This clause covers the specifics of payment for the subscription, including the frequency of payments, accepted payment methods, and any fees and tax obligations.
• Confidentiality and Non-Disclosure Agreements: As you are likely to be processing users’ personal information, it’s important to prioritize data protection and privacy by including a clause in your Subscription Agreement that informs users about how you handle their data. It is also recommended that you link to your Privacy Policy to provide a full description of your privacy practices.

🔎 You can learn more about privacy policies here 👉 4 Reasons Why You Need A Privacy Policy

• Licensing Information: This clause outlines the use restrictions of any software associated with the subscription, including all limitations.
• Third-Party Information: This clause enables you to inform users about the sharing of their information with third parties and how these relationships are managed.
• Termination and Cancellation Policies: This clause outlines the circumstances under users may terminate the subscription, as well as any penalties or obligations associated with early termination or cancellation.
• Limitation of Liability: This clause establishes the provider’s extent of liability for damages arising from the use of the subscription service.

🔎 Find out more 👉 What is a Limitation of Liability Clause? Here’s Everything You Need to Know

• Disclaimer of Warranties: This clause highlights any warranties rules, or exceptions regarding the subscription service.
• Free Trial Information: If the subscription service includes a free trial period, this clause outlines the terms and conditions of the trial, including any limitations on usage and the obligations of both parties following the conclusion of the trial.
• User Requirements: This clause outlines the obligations of the user when using the subscription service, including any restrictions on usage, requirements for maintaining the security of user accounts or login credentials, and provisions related to user privacy and data protection.

How to Display a Subscription Agreement

A Subscription Agreement should be prominently displayed on a business’s website or within its app. It should be easily accessible to customers before they sign up for the subscription service.

Getting Consent to Your Subscription Agreement

Obtaining consent to your Subscription Agreement is a critical step in ensuring that your subscribers understand and agree to the terms of your subscription service. Before users can access your service, they must first agree to the terms outlined in your agreement.

To ensure that this process is effective, your consent process should be clear and transparent. You can achieve this by placing your agreement in a prominent location on your website or application, ensuring that it is easy to read and understand.

The best practice for this is to use a clickwrap agreement, which requires users to take an affirmative action, such as clicking a checkbox, to indicate their agreement to the terms.

A Subscription Agreement is crucial for any business that offers subscription-based services or products. It protects both the business and the users by clearly outlining the terms and conditions of the subscription relationship.

🔎 If you’re a business owner, it’s essential to seek legal advice and guidance when creating your customized agreement to ensure that it’s legally binding and protects your interests.

👋 Here’s how to easily add your subscription-related clauses with iubenda software solutions:

• 🚀 Use iubenda’s Terms and Conditions Generator;
• 🚀 Create your customize Terms and Conditions document;
• 🚀 Select our pre-drafted clauses (subscription-related clauses, Trial, offers and discounts and Business model, payments and user rights, etc.);
• 🚀 Follow our instructions to quickly install the document on your website!

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