What is a Terms and Conditions Review?
A terms and conditions review oversees your company’s terms of service, privacy policy, and user agreement.
A service agreement's terms and conditions are an important component that ensures the parties involved understand their rights and responsibilities. They also provide context around the intent and purpose of a transaction.
As a business, you have legal responsibilities to a website or app user. As the provider, you must explain their rights and obligations when entering a contractual relationship with your company.
All business that have terms and conditions can benefit from a terms and conditions review, but this review is especially important for SaaS companies and technology businesses. For those companies, the terms and conditions review is a vital part of their risk management strategy.
Here is an article that defines terms of service.
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How Do I Review Terms and Conditions?
You can review your terms and conditions in several steps.
1. Examine Your Most Important Terms and Clauses First
The best way to review your terms and conditions is to ensure that all the necessary components are present. If you are missing any elements, or if they are not reflective of current regulations or policies, they should be your top priority.
You should also seek
intellectual property
protection to ensure your business’s IP is secure under your terms and conditions. If you have anything copyrighted, ensure it is protected under the Digital Millennium Copyright Act Notice and policy.
2. Check Your Privacy Policy
Privacy policies are an integral part of digital business, and you should review your privacy policy regularly to minimize risks. In addition, as rules surrounding data collection continue to change, companies are at a more outstanding obligation to revise their privacy policies regularly.
For example, the California Consumer Privacy Act requires all businesses in CA to update their privacy policies at least once every 12 months.
3. Consider Language Usage
Is the language in your
terms of service agreement
easy to understand? Avoid any ambiguous phrasing or overuse of legal jargon. Too many technical terms can make your policies unclear, resulting in confusion or unnecessary lawsuits from users.
Most importantly, using approachable language helps build trust with your consumers. Your terms and conditions are there to protect them as well.
4. Ensure You’re Legally Protected
Make sure that your terms and conditions have clauses like
indemnification
and
termination. Indemnity clauses define who pays for losses or damages and, in some cases, legal fees in the event of a lawsuit.
Termination clauses set the framework for ending user agreements or subscriptions without legal penalties. This can also reserve the company’s right to terminate a user’s agreement or revoke their user license under certain circumstances.
5. Look for Blank Spaces
Blank spaces in a contract template or drafted contract can potentially render it legally void, if critical information is left out. Therefore, ensure that your terms and conditions agreement has no blank spaces left to be filled.
A large amount of white space in legal documents can impose the risk of modification after agreement or signatures; any blank spaces make a contract incomplete, so you should carefully check the structure of your terms and conditions before you publish it.
Here is an article with ContractsCounsel’s 2022 contract review checklist that will help you quickly review your terms and conditions agreement.
What Should You Look for in a Terms and Conditions?
When reviewing terms and conditions agreements, you should check that all the contents are legally compliant with federal, state, and industry regulations.
Your contract should also establish a governing law, which describes the state’s laws governing the document’s terms and conditions.
Another important detail to look for provisions for future changes. Reserve a portion of the agreement to reserve your right to make changes to the agreement, describe how you will notify users of any changes, and identify the time period you will provide before the changes are incorporated.
Here is an article about how to write a terms and conditions agreement on your own. This post is also helpful when reviewing your existing document to ensure you’ve covered all the necessary elements.
Should You Review a Terms and Conditions?
Every business should review its terms and conditions agreement each year and other important documents related to its users. A terms and conditions review should happen annually, though some companies may review theirs every 6 months or quarterly.
It is important to ensure that your terms and conditions review protects your company as much as your users. Ultimately, the goal is to build a mutually beneficial and satisfactory contractual relationship for all parties.
Suppose you make changes to documents like your user license agreement or privacy policy. In that case, you should also review your terms of service/terms and conditions.
Here is an article about what your business should always look for in its terms and conditions review.
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Risks of Not Reviewing Terms and Conditions
Failing to meet legal requirements is the most significant risk of not performing an annual terms and condition review. However, you could also risk not protecting your business adequately.
For example, without reviewing terms and conditions regularly, you might miss legal loopholes that allow users to have multiple copies of your software or share your services with others free of charge.
Your company could also fail to exercise the full authority of its service. In this situation, users could sue your business if you terminate their contracts or close their accounts without due notice or legal cause.
Here is an article with 8 common issues in terms of service agreements to watch out for.
What Does a Lawyer Charge to Review a Terms and Conditions?
According to ContractsCounsel’s marketplace, the average terms and conditions review cost is $485 in every state and industry.
Attorneys charge an hourly rate and sometimes other fees for their services. Therefore, you will have to pay additional costs if you want the lawyer to update your contract terms or draft a new one entirely.
Here is an article with more information on the average terms and conditions cost with ContractsCounsel.
What are Terms and Conditions Examples?
Examples of terms and conditions include:
- Terms of service agreements
- User agreements
- User license agreements
When you download an app or sign up for a website, you are usually shown a pop-up or web page outlining the company's rights and obligations. There are also requirements for users to maintain their accounts.
Other examples of contracts that include terms and conditions are:
- Employment agreement
- Real estate contract
- Construction contract
- Insurance contract
- SaaS Agreement (software-as-a-service)
Here is an article with several examples of real terms and conditions and a template you can review.
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