Contracts vs. Terms of Use — What’s the Difference?
You’ve probably heard both of these terms tossed around:
Contracts and Terms of Use.
But what’s the difference? And when do you need one or the other?
If you sell services, coaching, or digital products—this blog post will give you legal clarity (without the legalese).
Contracts = 1-on-1 Client Agreements
You use contracts when:
● You’re providing a service
● You’re working directly with a client
● You’re customizing something for them
● You want both sides to sign and agree
Examples:
● Coaching agreements
● Design or copywriting service contracts
● VIP day or done-for-you project terms
Contracts are mutually signed and enforceable in court.
Terms of Use = Mass-Distributed Product Agreements
You use terms of use when:
● You sell a digital product (course, ebook, template)
● There’s no direct contact with the buyer
● The agreement is accepted with a click, not a signature
● You need to protect your content + boundaries
Examples:
● Course access rules
● Template license terms
● Website footer links
Terms of Use are one-to-many and live on your sales page or checkout flow.
Using the Wrong One Can Leave You Exposed
If you only use a contract for a digital download, it might not be enforceable.
If you don’t use a contract for 1:1 services, you may have no way to enforce deadlines,
payments, or deliverables.
✅ When to Use Contracts vs. Terms of Use
If you offer… Use a…
1-on-1 coaching Contract
Templates or downloads Terms of Use
Online course Terms of Use
Custom branding Contract
packages
Group program Both (if needed)
Confused about when to use a contract and when to use Terms of Use? You’re not alone.
One protects your services. The other protects your products.
Start with our free Website Terms of Use Template—customizable for your site, sales
pages, or digital download shop.
Download it here and legally cover your digital business today.
