Terms of Service for Indian Businesses: Legal Compliance Guide
Terms of Service (ToS) are the legal agreement between a business and its users that govern the use of a website, application, or service. In India, with over 800 million internet users and growing e-commerce regulations, having legally compliant Terms of Service is not optional—it is a regulatory necessity under the Information Technology Act, 2000 and the Consumer Protection (E-Commerce) Rules, 2020.
From Zomato and Swiggy to small D2C brands, every digital business in India must have clear, enforceable Terms of Service that address consumer rights, liability limitations, and dispute resolution.
Mandatory Provisions Under Indian Law
E-Commerce Rules 2020 Requirements
Display seller details and origin of goods, provide pre-purchase information on price/charges/fees, offer cancellation and return windows, display grievance redressal mechanism, and comply with the 48-hour complaint acknowledgement requirement.
IT Act Compliance (Section 79)
Intermediary guidelines require due diligence, content takedown within 36 hours of court/government order, and appointment of Grievance Officer, Nodal Contact Person, and Chief Compliance Officer for significant social media intermediaries.
Consumer Protection
No unfair contract terms (Section 2(46) CPA 2019), mandatory cooling-off period for certain services, clear refund and cancellation policies, and prohibition on misleading advertisements.
Enforceability of Click-Wrap and Browse-Wrap
Indian courts have generally upheld click-wrap agreements (where users must click “I Agree”) as enforceable contracts. Browse-wrap agreements (where terms are posted via a hyperlink) are less certain. In the landmark Trimex International FZE Ltd. v. Vedanta Aluminium Ltd. case, the Supreme Court recognised electronic contracts. Best practice for Indian businesses: use click-wrap with a mandatory checkbox before account creation or checkout, and maintain timestamped records of user acceptance.
Key Takeaways
- ✓ Comply with Consumer Protection E-Commerce Rules 2020 and IT Act intermediary guidelines
- ✓ Use click-wrap (checkbox + “I Agree”) rather than browse-wrap for enforceability
- ✓ Include clear refund, cancellation, and grievance redressal mechanisms
- ✓ Specify governing law (Indian law) and dispute resolution (Indian courts/arbitration)
- ✓ Appoint a Grievance Officer and display contact details prominently
Frequently Asked Questions
Can ToS include a mandatory arbitration clause?
Yes, but consumer disputes can still be filed before Consumer Forums regardless of arbitration clauses. Indian courts have held that consumer protection jurisdiction cannot be ousted by contract.
Is a Grievance Officer mandatory?
Yes, for intermediaries under the IT (Intermediary Guidelines) Rules 2021. Name, contact details, and mechanism for complaints must be published on the website.