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
CC verified
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."
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I am the Founder and Managing Attorney of DMD Law, PA. and have 20 years' experience. I am a business-oriented, proactive, and problem-solving corporate lawyer with in-house experience. My firm's practice focuses on ensuring the legalities of commercial transactions and contracts. I am adept at reviewing, drafting, negotiating and generally overseeing policies, procedures, handbooks, corporate documents, and contracts. I have a proven track record of leading domestic and international companies by ensuring they are functioning in complete compliance with local, federal and international law. I also help clients with their estate planning documents. In all projects, the firm's goal is to simplify the law and provide clients with the confidence and information necessary to make their decisions.
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Web Development
Terms of Service
Texas
Can I customize my terms of service?
I am currently in the process of launching a small business online and need to create a Terms of Service for my customers. I am looking for a way to customize the terms to fit my specific business needs and I would like to know if this is possible and what legal implications I should be aware of.
Darryl S.
not only can these be customized, they should be customized for your specific offering.
Business Contracts
Terms of Service
Texas
How to include confidentiality in terms of service?
I recently started a business and need to include terms of service for my customers. I want to ensure that all customer data is kept confidential and secure, and am looking for advice on how to include this in the terms of service. I understand the importance of having a well-drafted terms of service to protect my business, and I want to make sure that the terms of service include confidentiality provisions.
Darryl S.
Very easy to include this in your Terms of Service. Let me know how we can help.
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.
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Terms of Service
Washington
Do beta testers need a special terms of service?
I am currently developing a software product and I am looking to have beta testers test out the product. I want to ensure that I have all the necessary legal documents and agreements in place before I allow any beta testers to access the product. I am wondering if beta testers need a special terms of service that is different from the standard terms of service agreement that would be given to customers when they purchase the product.
Merry K.
In both instances, you should incorporate some type of non-disclosure agreement. For beta testers, you need to address whether you are paying the beta testers in any way, shape, or form, such as a discount for the final software.
International
Terms of Service
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How does GDPR affect my terms of service?
I am a business owner in the EU looking to create a terms of service for my website. I am concerned about the impact of GDPR on my terms of service, as I want to ensure I am in compliance with the law and that my customers' data is secure. I am also interested in understanding the implications of GDPR on my business and any additional steps I need to take to ensure compliance.
J.R. S.
The best place to start is on the GDPR website, found here: https://gdpr.eu/what-is-gdpr/. On this page you will see a yellow box on the right side of the webpage that has hyperlinks to three key documents, the Data Processing Agreement, Right to Erasure Request, and Privacy Policy. Those links will take you to downloadable PDF's that you can use and incorporate into your website as a part of your terms and conditions. All three of these documents and their proper usage will aid in any compliance reporting measures. If you need or want additional consultation on specifics and how it applies to your organization, please feel free to reach out.
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