Do You Need A Digital Product Purchase Agreement?!

If you are selling any type of digital product on your website, the simple answer is YES! You need a Digital Product Purchase and Use Agreement. Digital products are unique in many ways that tangible product sales are not. The one big thing is that they CANNOT BE RETURNED!!!! Once the product is purchased and in the hands of the customer—usually by way of a downloadable link sent directly to their email address—you can never get that product back. They then have full control over what they do with it. Remember, even if a customer says “they haven’t downloaded the product and don’t intend to” you have no ability to actually know if that’s true. This is why having a very clear Digital Product Purchase & Use Agreement will save you tons of time and headache, because the customer is aware of your policies prior to making the actual digital purchase.

You will want to have your Digital Product Purchase & Use Agreement available and conspicuous at checkout. This allows the customer to understand and agree to your terms in advance. TLP always suggests adding in an extra layer of protection during checkout such as an ‘I Agree’ box where the customer has to voluntarily check the box or actually type in the words “I agree” to show they did indeed sign onto your company’s purchase agreement (note: make sure your checkout process does not have this box pre-checked because then your customers can argue they didn’t read the terms of purchase and it was merely automated to agree to at checkout).

The Digital Product Purchase & Use Agreement can either be linked or available in a read-through box at checkout depending on how the backend of your e-commerce shop. Here are two examples:

Then, within your contract, it will include legal clauses such as your company's ownership of the digital product copyright, no refunds due to the immediate nature of digital product delivery, one license to use the digital product, privacy considerations for online purchases made through credit cards, length of time users have access to the digital product, advertisements/sales/discounts applied at checkout, and more. This type of Digital Product Purchase & Use Agreement is oftentimes referred to as a "clickwrap agreement" for digital products.

Please remember that a Digital Product Purchase & Use Agreement is used alongside your general website terms and conditions and privacy policy! All three legal contracts are needed when you set up your digital shop. But, the most important one for actually selling a digital product is a Digital Product Purchase & Use Agreement at checkout.

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THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. EVERY SITUATION IS DIFFERENT & IS FACT-SPECIFIC. A proper legal analysis is necessary based on your location and contract. Consult an attorney in your home state for advice regarding your contract or specific legal situation.

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