Terms of Service: Reasons to Use and What to Include
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A terms of service set rules that users must agree to in order to use your website, application, or software program. While there are no laws requiring websites to implement a terms of service agreement, having one in place is recommended.
There are several different names for a terms of service agreement:
- Terms of Use
- Terms and Conditions
- Website Terms and Conditions
What are Terms of Service?
Terms of service, often abbreviated as ToS, are legal agreements between service providers and their clients or users. Terms of service are typically published on a company’s website for user to review and agree to before using the service.
ToS agreements can include various elements, including:
- Accountability provisions
- Liability provisions
- Opt-Out provisions
- Privacy policies
- Acceptable usage
- User rights and responsibilities
- Payment details for memberships, subscription fees, and the like.
In short, a ToS is simply a contract where the owner clarifies the conditions that a user must meet to use its service. Some examples include:
- Copyright and the use of content
- Rules users must follow when interacting with other users
- Cancellation of user accounts
Reasons to Use Terms of Service
There are currently no laws in place that require websites or companies to use a terms of service agreement. However, a ToS is helpful to set expectations for your users and prevent abuse. The agreement outlines what the users can expect while using your website or product and how users must behave.
While websites are not required to have a ToS, they are required to have a privacy policy. Privacy policies protect users' sensitive data:
- Email addresses
- Names
- Billing Information
- Shipping Addresses
Copyright Infringement
Your ToS agreement informs users that you own the site and its content. Any unauthorized use constitutes copyright infringement. You own everything on your site, and the ToS helps preserve ownership of your content.
Owned content can include:
- Content such as blogs and photos
- logo
- website design
Clauses connected to content ownership are called Intellectual Property clauses.
Abusive Users
Additionally, having a Terms of Service agreement in place gives you the right to terminate user accounts should they violate the agreement. These clauses make it clear that users can have their accounts canceled and even permanently banned if they abuse the website.
Governing Law
The terms of service agreement establishes "Governing Law." The Governing Law clause determines the jurisdiction and state laws that oversee, enforce, and interpret the contract.
For example, if your company is based out of Los Angeles, you would include a statement in the ToS indicating that California laws govern the agreement. Additionally, the ToS operates under US federal law. If you were to move jurisdictions, this section would need to be updated.
Here is an article about why you need a Terms of Service agreement.
Image via Pexels by PhotoMIX Company
What Should Terms of Service Include?
A terms of service is extensive and has various parts, but you will want to include:
- A clear definition of your company and properties
- Links to separate documents detailing your policies, such as privacy, security, and return policies
- Disambiguation or definition of keywords and phrases
- User rights and responsibilities
- A statement regarding age restrictions to comply with the Children's Online Privacy Protection Act of 1998 (COPPA)
- A list of the responsibilities community members must follow regarding commenting on your blog posts or communicating with other users
- An outline of the illegal behavior that can get an account removed or banned
- Detail inappropriate behavior, including spamming, posting pornographic materials, or linking to such.
- A statement about applicable fees and their related services
- Intellectual property clauses about who owns what contents
- An ambiguous "change" clause states that you reserve the right to modify or change any part of the agreement.
- Termination clause about banning someone
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Should Reading the Terms of Service Be Made Mandatory?
Do people even take the time to read a terms of service? If there is ever a dispute, making it mandatory for new members to opt-in to your ToS is the safest route. The best method is to use a clickwrap agreement.
Should You Use a Terms of Service Template?
Terms of service appear simple. However, they are meant to meet highly complex and specific scenarios and are legally binding contracts.
Each terms of service agreement protects the owner and user, so it must match your:
- Business model
- Business processes
- Applicable jurisdiction
Downloading a free template online will not accomplish these goals. It is recommended to work with a technology lawyer to help you draft your terms of service.
Who Needs Terms of Service?
Anyone building a website for their business should include a terms of service agreement on their website. Even if you are a small business, a ToS can save you many headaches later.
In some cases, you may enlist a lawyer to help you. Lawyers can:
- create your ToS document for you
- simply review the one you already created
Small businesses should consider getting a lawyer to create their ToS if:
- they are involved in e-commerce
- gather user's personal data
- marketing their intellectual property online
- talking to an audience under 13 years
Here is an article about terms of service and who needs it.
Terms of Service Templates
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Are Terms of Services a Contract?
Terms of service are terms that a user must accept before using or purchasing a site's service, whether that is:
- Purchase of goods
- Access to an application
- Access to membership or registration-based site
When the user accepts the term by either checking a box, hitting a button or digitally signing, the ToS becomes a legally binding contract.
If you update your terms, you must notify customers, users, or consumers. They have no way of knowing if your ToS have been updated on their own, so they cannot agree to the new terms.
It is recommended that you do not include clauses that allow you to change the terms without prior notice. Otherwise, users are accountable to all future contacts that do not even exist yet. Including this clause may make your ToS unenforceable.
Examples of Terms of Service
Creating a terms of service agreement can be intimidating. A prime example of a good Terms of Service document is Google's ToS.
At the very beginning, Google calls out how easy it is to skip reading the ToS and just accept it, but they implore you to keep reading.
What makes Google's ToS so good?
- It is relatively short compared to other ToS documents.
- It is easy to read.
- It includes a table of contents.
- Use of bold headers and bullet points.
- Minimal legal jargon.
While we are not saying you should just copy another site's ToS, you will want yours to be as good as Google's.
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Tim E.
Tim advises small businesses, entrepreneurs, and start-ups on a wide range of legal matters. He has experience with company formation and restructuring, capital and equity planning, tax planning and tax controversy, contract drafting, and employment law issues. His clients range from side gig sole proprietors to companies recognized by Inc. magazine.
"Tim was excellent! I gave him project details (liability waiver and rental agreement) and what I needed and he produced the day he said he would with ZERO revisions needed. Highly recommend."
Meghan P.
I am a licensed attorney and a member of the California Bar. I graduated from the University of Dayton School of Law's Program in Law and Technology. I love IP, tech transfers, licensing, and how the internet and developing technology is changing the legal landscape. I've interned at both corporations and boutique firms, and I've taken extensive specialized classes in intellectual property and technology law.
"Meghan was great to work with! She understood everything perfectly and delivered greatly."
William B.
Attorney based in Southern California (for in-person matters), taking clients globally/remotely for CA-specific and Federal legals needs. Owner and operator of Alchemist Attorney, Inc. (www.alchemistattorney.com).
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Ben is the founder of the Middleton Law Firm (2022). He has experience in the European Union and the United States. He interned with the University Rijeka, Croatia assisting businesses with trademark, Uniform Domain-Name Registry Dispute Registry, European General Data Protection Regulation (GDPR) privacy law compliance, and International Comparative Copyright issues as the country itself prepared itself for European Union statehood. He worked with Michigan State University's Anti-Counterfeit and Product Protection (A-CAPP) Center to protect and enforce its intellectual property in foreign territories and moderated panel discussions with brand owners and U.S. Customs to curb counterfeit products. Ben assisted indigent artists with legal issues and in some cases brought their works to life with Georgia Lawyers for the Arts. Ben is admitted to the federal courts of Georgia. Before practicing law, Ben worked for Core Security and Meridian Link as a software QA engineer in the information technology (IT) space. Ben produced countless commercial music recordings, engineered hundreds of songs, and served as executive producer seven studio albums as a founding member of member of Million Dollar Minds Entertainment (Est. 2006). He is an alumnus of The South Carolina State University (Bulldogs) and Michigan State University (Spartans).
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Attorney Skelly is a midwestern transplant from Iowa. She has been in Florida for the past 11 years. She went to undergrad at Buena Vista University, which is a small liberal arts college in Storm Lake, Iowa. After graduating with her Bachelor's degree in criminal justice, she went on to obtain her Master's degree in criminal justice from Kaplan university, which is now Purdue Global. While attending school full time for her Master’s degree, Attorney Skelly worked full time in social services helping children and their families who were involved in the dependency system. Attorney Skelly has a professional background in child welfare and social services having worked for 18 years in the field. Attorney Skelly always had a lifelong dream of becoming a lawyer and decided to fulfill her goal in May of 2019 by starting law school at Western Michigan University Thomas M. Cooley Law School at their Riverview campus. She did their accelerated program and completed law school in just over two years and graduated magna cum laude with honors. Attorney Skelly also received certificate of merit awards, which means attaining the highest grade in the class in secured transactions, research and writing, and family violence practice. While in law school Attorney Skelly was a teaching assistant to two tenured professors as well as a note taker for those students who had accommodations. She was also awarded the Alumni Association’s Distinguished Student Award. In her legal career, Attorney Skelly started out at the State Attorney’s Office in Fort Myers, FL. She helped prosecute several cases and personally worked as second chair on 9 jury trials and one bench trial. Once Attorney Skelly passed the bar, she worked for a family law firm under a board certified marital and family law practitioner where she gained tremendous knowledge in the area of family law which includes divorce, paternity, child custody/parenting plans, alimony and child support as well as domestic relations issues such as domestic violence injunctions. Attorney Skelly is also certified as a Guardian ad Litem and can serve as a Guardian ad Litem in family court cases. Attorney Skelly is a proud member of the Florida Bar, the Lee County Bar Association, and the American Bar Association.
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Advertising
Terms of Service
Texas
Can I limit reviews using terms of service?
I recently started a small business and I am in the process of creating a website for my business. I want to ensure that customers are not able to post negative reviews on the website, as this could have a detrimental effect on my business. Therefore, I am interested in learning if it is possible to limit reviews using terms of service.
J.R. S.
Businesses can take steps to discourage or prevent negative online reviews, but they must be careful not to infringe on the rights of consumers and other businesses to post such reviews. The Texas Citizens Participation Act (TCPA) protects the posting of consumer opinions or reviews about businesses. The TCPA statute also allows for dismissal of legal actions based on or in response to a party's exercise of the right of free speech, right to petition, right of association, or arises from any act of that party in furtherance of the party's communication or conduct. If dismissed under this chapter, the court may award sanctions against the party who brought the legal action to deter similar actions.
Business Contracts
Terms of Service
Washington
Should I cover updates in my terms of service?
I am the owner of an online retail business that sells products and services to customers. I am in the process of creating a terms of service agreement for my business and I am wondering if I should include language that would cover updates to the terms of service in the future. I want to make sure that I am protecting my business and customers from any potential issues that may arise due to changes in the terms of service.
Merry K.
Yes. There are at least two ways to do this. The better method is to send amendments to the TOS to all clients, and have them agree to each amendment if and when it arises. The poorer method is to simply refer to any future amendments when the client first signs the TOS as being incorporated automatically; I don't think that's a good idea.
Web Development
Terms of Service
Texas
How enforceable are “clickwrap” terms of service?
I am a small business owner who is considering using a software platform that requires users to agree to its terms of service in order to use the platform. The terms of service are presented in a 'clickwrap' format, meaning that users must click a box to agree to the terms. I am concerned about the enforceability of this type of agreement and would like to understand more about how it works.
Darryl S.
Clickwrap agreements, where the user must click "I agree" to the terms before proceeding, are generally enforceable if crafted properly.
Web Development
Terms of Service
Texas
Can users waive rights in the terms of service?
I am considering creating a website and offering a service to users. I want to make sure that I am properly protecting my rights as the service provider, and so I am looking to create a Terms of Service. I am wondering if it is possible for users to waive their rights in the Terms of Service, and if so, what the legal implications of this would be.
Darryl S.
Yes - that is one of the main purposes of a terms of service is to outline and restrict the user's rights. But you need much more than Terms of Service to properly set up a website and protect your interests (e.g. Cookie Policy, Privacy Policy, etc.). This is one of my areas of focus, so reach out if I can be helpful. d@fixedfeelawfirm.com
Business Contracts
Terms of Service
Washington
Can terms of service dictate user behavior?
I recently started using a service that requires me to agree to its terms of service. I have noticed that some of the terms of service appear to dictate behavior outside of the scope of the service. I am concerned that this could potentially be a violation of my rights and would like to know if these types of terms of service are legally enforceable.
Merry K.
Your question is too broad to address, as it depends on what behavior is being dictated. For example, if you are using a website and you're not allowed to call people names on the site, that would be within the scope; but if you're being told you can't smoke cigarettes while using the service, that would most likely be outside the scope and not legally enforceable. But it really depends on the terms to which you've agreed, too.
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