Separating Buyer & Seller Terms
Marketplaces are unique — you have two sets of users with conflicting interests. Your T&C should clearly separate buyer terms from seller terms to avoid confusion and disputes.
Consider separate sections for:
- Buyer terms: Purchase process, refunds, dispute resolution, warranty rights, consumer protection
- Seller terms: Listing requirements, commission fees, payment schedule, prohibited products, suspension policy
- Platform terms: Account suspension, intellectual property, liability caps, payment processing
Many marketplaces use separate T&C documents for buyers and sellers, with a shared "Platform T&C" that applies to both. This approach is clearer and reduces disputes.
Seller Commission & Fee Structure
Your revenue model depends on transparent commission fees. If sellers don't understand how fees work, they'll complain and churn.
Your T&C must clearly state:
- Commission percentage: "We retain 15% of each sale. The seller receives 85% minus payment processing fees."
- Payment processing fees: If you use Stripe or PayPal, disclose their fees. "Payment processing fees (~2.9%) are deducted from the seller's share."
- Fee changes: "Commission rates may change with 30 days notice. Sellers can delete their account to opt out."
- Payment schedule: "Seller payouts occur weekly on Mondays" or "monthly on the 1st"
- Disputed transactions: "If a buyer disputes a transaction, the seller's payout is held until resolution (up to 90 days)."
- Refund responsibility: "Sellers must process refunds. If a seller doesn't refund within 7 days, the platform will deduct from their next payout."
Prohibited Listings & Content Moderation
What can and can't be sold on your marketplace? Set clear rules to protect your platform from legal liability.
Your T&C should explicitly prohibit:
- Illegal products: Weapons, drugs, counterfeit goods, stolen items
- Hazardous materials: Chemicals, flammable items, biohazards (unless properly certified)
- Intellectual property violations: Counterfeit branded goods, pirated software, unlicensed content
- Adult content: Explicit material, sex work, escort services
- Services requiring licenses: Legal services, financial advice, medical services (unless seller is licensed)
- Scams: Multi-level marketing, pyramid schemes, get-rich-quick schemes
Moderation process:
- "Listings are reviewed manually or via automated systems. We reserve the right to remove prohibited listings without notice."
- "Sellers have the right to appeal listing removals within 7 days by contacting support@marketplacename.com."
- "Repeated violations result in account suspension or permanent removal."
Buyer Protections & Dispute Resolution
Buyers expect protection if a seller doesn't deliver or a product is faulty. Your marketplace is liable if you don't have a dispute resolution process.
Your T&C should cover:
- Dispute window: "Buyers have 30 days from purchase to open a dispute if the product doesn't arrive or doesn't match the listing."
- Dispute process: "The buyer and seller have 5 days to resolve. If unresolved, the marketplace mediates. Mediation takes 5–10 business days."
- Refund guarantee: "If no resolution, the buyer receives a refund. Sellers can appeal the decision."
- Item not as described: "If a product doesn't match the seller's description, the buyer can request a return and refund."
- Seller non-response: "If a seller doesn't respond to a dispute within 2 days, the buyer may escalate to marketplace arbitration."
Seller Account Suspension & Termination
You need to be able to remove bad sellers without legal liability. Your T&C should clearly state when and how accounts are suspended.
Your T&C should state:
- Suspension causes: "Accounts may be suspended for: (a) violating T&C, (b) high dispute/chargeback rates (>10%), (c) fraud or misrepresentation, (d) illegal activity."
- Notice and cure period: "We will notify sellers of violations and give 7 days to correct before suspension (except for illegal activity, which results in immediate suspension)."
- Payment hold: "Upon suspension, outstanding payouts are held for 90 days pending investigation. If no violations found, payouts resume."
- Appeal process: "Sellers can appeal suspension by contacting support@marketplacename.com within 14 days."
Platform Liability & Indemnification
Marketplaces are intermediaries — you're not the seller, so you shouldn't be fully liable for seller misconduct. However, you can't avoid all liability.
Your T&C can state:
- Liability cap: "Our total liability for any claim is limited to the gross transaction value of transactions in dispute (up to $100,000)."
- Exclude indirect damages: "We are not liable for lost profits, lost business, or reputational harm."
- Seller liability: "Sellers indemnify and hold the platform harmless for claims arising from their listings, products, or conduct."
However, you CANNOT exclude liability for:
- Your own fraud or gross negligence
- Failure to implement reasonable trust and safety measures
- Enabling illegal activity you knew about
Intellectual Property & Seller Warranties
- Listing ownership: "Sellers warrant they own or have the right to sell all items listed. Sellers indemnify the platform against IP infringement claims."
- Brand guidelines: "Sellers must not use trademarked terms in titles unless they are authorized retailers."
- Image ownership: "Seller photos must be original or properly licensed. Stock photos without license are prohibited."