A terms of service, sometimes called a terms of service agreement or a terms and conditions agreement, is a legal agreement between a service provider and their client. It established the rules, regulations, and guidelines visitors must follow to use a website or app software.
Using a terms of service protects other users. It ensures that your company’s rights and responsibilities are lined out for all visitors.
Below are 9 things to include in a terms of service to protect your software and business.
1. Description of the Service
As a legal agreement, the terms of service agreement must explain the document's contents. The description allows a service provider to define the parameters of their product to ensure there is no confusion over the use of website or app services by consumers.
The description of services also allows your company to establish “governing law.” This clause expresses what jurisdiction oversees and enforces the guidelines and regulations within the contract.
Here is an article explaining governing law and its importance in business contracts.
2. Accountability Provisions
Accountability provisions are often part of a terms of service that allow either the company or user to terminate the use of the service at any time, for any reason, with no explanation.
However, if payment is involved, the company must express, in a termination of services agreement, how they will handle transactions and payments for a service they decide to discontinue.
An accountability provision can also state any rules and regulations a user must uphold to continue accessing the services provided. For example, suppose they do not uphold their responsibilities as visitors. In that case, the company can reserve the right to terminate their account and ban access to their website, app, or software.
Here is an article that explains accountability vs. responsibility.
3. Liability Provisions
The terms of service allows you to limit liability through a warranty disclaimer ; this means that you will not be held accountable for things such as:
- Errors in content
- Personal injury
- Property damage
- Lost profits
- Web service
- Computer/device failure
- Punitive damages
There is a wide range of consequences and adverse effects people can experience while using a website or app. Liability provisions limit the company’s responsibility and ensure that it is not held responsible for personal injury or damages that a visitor sustains.
An article gives an example of liability terms in a service agreement.
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4. Opt-Out Provisions
As part of a user license agreement, the company must provide users with provisions to opt out or cancel their use of the software, website, or app at any time. There should also be a defined, easy method for canceling services and terminating all interaction with your product/service.
Some opt-out provisions are required by law, such as the right to decline sharing data or personal information. For example, the CPPA consent for websites allows visitors to deny cookies and data collection in compliance with CPPA.
Here is an article where you can learn more about opt-out provisions.
5. Privacy Policies
A privacy policy is, by far, the most widely discussed aspect of any user agreement. In the digital age, extreme attention should be placed on how companies and their websites/apps collect, store, and share user information.
A privacy policy explains how your site collects, stores, and uses user data. It can also include disclosure on whether or not users’ information is shared with third parties, whether or not their data is encrypted and de-identified, or whether it will be sold to third parties.
Regulations such as California’s CalOPPA and the European GDPR protect web and app users by requiring companies to include easy-to-understand privacy policies in their terms and conditions or terms of service agreements.
A privacy policy should also allow users to access, correct, and delete their personal information with your company free of charge.
Here is an article that explains privacy policies.
See Terms of Service Pricing by State
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6. Acceptable Usage
Acceptable usage clauses outline the guidelines for behavior that users must follow to maintain access to a site or app. Acceptable usage can help:
- Prevent abuse
- Protect underage users
- Prevent illegal activity and cyberattacks
- Prevent the misuse of the company’s services
Acceptable use policies, or AUPs, describe the appropriate conduct for users of a site or app on the internet. It clearly states what they may and may not do and the potential consequences for violating the acceptable usage terms.
Here is an article that outlines an acceptable use policy.
7. Right to Termination
The company can reserve the right to terminate a user’s account for a previously agreed-upon reason. This is generally when there is any breach of the previously accepted terms of service and user license agreement.
Including a right to termination, the clause protects the company against liability under unlawful or premature termination claims.
Here is an article where you can learn more about the right to termination in business contracts.
8. User Rights and Responsibilities
Users have a right to their personal information and the right to opt out of services, cancel subscriptions, and maintain their own autonomy on a site. These responsibilities can protect others by prohibiting a platform's harmful, illegal, and abusive behaviors.
Responsibilities for the user can also protect the company from future litigation. This means requiring the user to provide consent and confirmation for certain actions, such as account deletion, to ensure that they are not charged with unlawful conduct later.
Here is an article with more information on writing detailed user agreements.
9. Payment Details
The terms of service should include how payment information will be collected and stored. Users have a right to be fully aware of how their card and bank information is shared and who can access it within the company.
The terms of service may also express how users will be charged based on:
- The number of payments being made
- The method of payment
- Applicable discounts
- Late fees
- Other miscellaneous charges
Here is an article that explains payment terms in terms and conditions.
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