That depends on the way we intend to use the type we are building. At this step, we write the signatures. Remember, signatures is writting the operators mentioned above the way we express mathematical functions. Any set in SET can be constructed, only, using these two operators. Having this list at hand, we need express each statment in a way reflecting how operator interact with each other, which inturn expresses our view about the data type being constructed.
Sone notes about term equality.
Any questions or comments, let me know.