Terms of Service Agreement Cost

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What does a terms of service agreement cost? If your company has a website or mobile app, this may be a question that you ask. So, let’s explore this question and review some general information about the terms of service agreements and when these contracts are used.

How Much Does a Terms of Service Agreement Cost?

A terms of service agreement is a legally binding contract most often found in the digital world. These agreements are commonly used by a company that provides a software service to the users of the service.

You may sometimes see this contract referred to as a terms and conditions agreement, a user agreement, or a terms of use agreement.

A terms of service agreement will cover important topics relating to the use of software or a website, such as:

  • Content ownership
  • Copyright information
  • Payments
  • How third-party websites may access data

Another important feature of a terms of service agreement is that it acts as a disclaimer to relieve the website or mobile app owner from specific liability issues that accompany their services. Again, this provides important protection to the business.

A terms of service agreement is an important document that must be drafted correctly to protect the business owner. For this reason, many companies choose to hire a lawyer to draft their contract.

A knowledgeable attorney will know what provisions and information the terms of service agreement must have to be legally binding and enforceable.

Based on ContractsCounsel’s marketplace data, the average cost of a terms of service agreement is $434.

Is a Terms of Service Agreement Necessary?

A terms of service agreement will protect a company that provides services through a website or mobile app by informing customers of their services and requiring customers to acknowledge and agree to certain terms.

While this agreement may not be necessary, it is strongly encouraged to have one to avoid liability issues in the future. Some important topics your terms of service agreement may cover include:

  • Terms associated with user account creation and maintenance
  • Copyright information for user-submitted content and dissemination of copyright materials
  • Restrictions on user-submitted content
  • Release of liability for any damages
  • How data is collected and stored
  • Whether third-party programs and apps will have access to stored data

When you meet with a lawyer to draft your terms of service agreement, your lawyer will help you determine which clauses need to be included to protect you and your business best.

What is Included in a Terms of Service Agreement?

Terms of service agreements can be customized to fit the needs of your business and tailored to the specific services your company provides through the website or app. Most terms of service agreements will include the following sections:

  • Term: When the agreement begins and how long it will last.
  • Services Provided: A description of your company's services will provide to the user through the website or mobile app.
  • Fees: A breakdown of how much the services will cost.
  • Billing: How payment will be collected and how payment information will be stored.
  • Indemnification: Release of liability for any damages that may arise from services provided by the company.
  • Dispute Resolution: A detailed dispute resolution agreement that describes how disputes will be handled if either party breaches the contract.
  • Termination: How the agreement can be terminated and any penalties that may occur for termination of the agreement.
  • Governing Law: The state or local laws that govern the agreement.

Additional clauses and sections can be added to a terms of service agreement if necessary.

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Terms of Service Agreement Drafting

A terms of service agreement is an important document that needs to be customized to fit the company's services. Many companies choose to hire an attorney to draft this contract to ensure it fully protects the company from liability and potential lawsuits.

A drafting project with a lawyer will usually start with a consultation. First, the lawyer will meet with the business owner and learn about the services provided and their concerns for liability protection. After this consultation, the lawyer will draft a customized terms of service agreement.

Terms of Service Agreement Review

Templates for boilerplate terms of service agreements are available and may work for some companies. These templates, however, are often very broad and may not provide full liability protection.

Suppose a company owner uses a template for their terms of service agreement. In that case, they should hire a lawyer to review the contract before using it. A lawyer will review the agreement and ensure that it includes all necessary information and adheres to local laws about terms of service agreements.

Terms of Service Agreement Drafting Cost

Hiring a lawyer to draft a terms of service agreement will incur legal fees because it requires the time and services of an attorney to complete the task. These fees will usually include time spent for consultations, drafting the document, and any communications between the lawyer and client.

ContractsCounsel’s marketplace data shows the average terms of service agreement drafting costs are $450 across all states and industries.

Terms of Service Agreement Review Cost

If a company chooses to use its own terms of service agreement but would like a lawyer to review the contract, it will be charged for the lawyer’s services and legal expertise.

ContractsCounsel’s marketplace data shows the average terms of service agreement review costs is $400 across all states and industries.

How Do Lawyers Charge for Terms of Service Agreements?

Hourly Rates for Terms of Service Agreements

Hourly rate fee structures are one of the common ways a lawyer will bill their clients. Using this fee arrangement, a lawyer will keep track of the hours they spend working on a client’s case or project and then bill their client for the total number of hours at a set rate. Billing can be done in increments like every month or sometimes in one large bill when the job is complete.

Hourly rate fee structures allow lawyers to ensure that they are fairly compensated for their time working on a particular project, like drafting or reviewing contracts.

For clients, this fee structure can create anxiety because they won’t know the total cost of legal fees until the case has been closed or the project completed.

ContractsCounsel’s marketplace data shows the average hourly rate for a contract lawyer ranges from $150 - $300 per hour.

Flat Fee Rates for Terms of Service Agreements

Although less common than hourly rate arrangements, flat fee rate structures are a good way for lawyers to charge clients for specific projects like drafting a contract. A flat fee rate allows an attorney to estimate the amount of time a project will take and quote a client a fee upfront.

ContractsCounsel’s marketplace data shows the average flat fee rate for a terms of service agreement is $434.

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