Terms of use, also known as a terms of service or terms and conditions, is a legally binding agreement between a user or client and the service provider.
The terms and conditions agreement can protect the company's legal interests while establishing regulations for appropriate behavior for the use of a product or service.
In its most comprehensive form, a terms of service agreement provides the rules, requirements, and specifications about liability for a company and client.
When you download an app or sign up for something on a website, you will likely see the terms of use. However, before you release a product, deploy a service, or issue a contract to a client, here are 10 things to include in a terms of use agreement.
1. User Guidelines
The website terms and conditions should include general requirements for appropriate user behavior. The same applies to mobile apps or software where users can interact with one another.
User guidelines may include things such as:
- A mandatory code of conduct that prohibits hateful or discriminatory speech
- Bullying
- Abuse
- Sharing offensive, violent, or pornographic material
Further guidelines can refer to particular elements of the service, such as how users may engage with the site, actions they are not allowed to do, and behaviors that are prohibited on the platform.
These guidelines protect everyone and create a safer, more inclusive environment for all users.
Here is an article that gives an example of user guidelines regarding service agreements.
2. The Right to Terminate Abusive Accounts
Following the explanation of user guidelines, you can reserve the right to terminate any accounts that violate the terms of use without warning or justification.
Failing to respect the rules and regulations of the developers results in a breach of contract. As a result, the site owners/app developers can end the agreement and close the user’s account.
Here is an article that provides an example of a termination of account clause.
3. How Users Can Terminate an Account
Another important element to include in your terms of use is an explanation of how users can terminate their accounts. To promote personal freedom and autonomy, the owners of a site or app should give users the ability to terminate their agreement and close their account at any time.
Account closure can either be done through the website or app, or users can request account termination through customer support. If the latter applies to your situation, include the appropriate contact information for users.
It can also be helpful to explain how user data will be kept and used after account termination.
Here is an article that explores some user rights in privacy policies.
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4. Warranty Disclaimer
A warranty disclaimer establishes a company’s stance on what they are and are not to be held accountable for. For example, the warranty disclaimer, also known as an as-is clause, can waive the company of any damages due to inaccurate content or malfunctioning products.
Essentially, disclaiming warranty means that users elect to engage with any product or services as they are and that the company will not take responsibility or offer compensation for any damages brought about by a faulty product or inaccurate content.
Here is an article that has more information on contract warranties.
5. Limitation of Liability
Limited liability refers to the boundaries of a service provider’s liabilities in the event of damages inflicted upon the user. This clause limits the financial, legal, and other penalties a company can face in response to any claims against them.
Using a limited liability clause, the service provider can create a maximum amount of damages they will cover in any event to protect their business.
The terms and conditions of liability will vary by law, so be mindful of your state’s regulations.
Here is an article on a limitation of liability in a terms of use agreement.
6. Governing Law and Legal Disputes
Governing law establishes what jurisdiction will handle any litigation against the service provider. A company’s headquarters will determine its governing legal body.
For example, in a SaaS agreement for a startup in San Francisco, the governing law will fall under the United States of America and the state of California.
Any legal disputes that arise between a client and the company will follow the governing law laid out in the terms of use.
Here is an article with an in-depth explanation and examples of governing law.
See Terms and Conditions Pricing by State
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
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- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
7. Intellectual Property Rights
Establish your business’s intellectual property (IP) and the ownership rights you have. This also limits any rights to ownership or distribution by users or clients who interact with your IP through your service.
Intellectual property is an intangible asset, like copyright or logo, that others cannot use without permission.
Here is an article to learn more about protecting your intellectual property.
8. Privacy Policy
A privacy policy outlines what type of data users consent to share using their products. It also includes restrictions and, in many cases, opt-out clauses for users to decline sharing personal information with the company.
A privacy policy should be written in easy-to-understand language. This ensures that everyone who uses a product or service can fully understand how a company will collect, use, and protect its data.
Depending on where you live, there are laws that you must follow to ensure your privacy policies are legal. These include the California CCPA and European GDPR.
Here is an article to learn how to write an online privacy policy.
9. Contact Information of the Service Provider
Users should always know how to reach the service provider for assistance. Therefore, the contact information in the terms of use must always be up-to-date. You can also lay out specific methods of communication that the company will include.
Valuable types of contract information to include are:
- A customer support email
- A phone number
- A mailing address
10. Signature or Digital Acknowledgement of Parties
All parties should sign and acknowledge that they have read, understand, and agree to the terms of use.
In many cases, users will click that they accept an agreement when they use a site or sign up for a service. This counts as acknowledgment, and they officially enter into an agreement to follow the company’s terms of use as long as they access the product.
Here is an article about why a terms and conditions agreement can benefit your website.
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