Website Terms of Service and Privacy Policy

What are Website Terms of Service (ToS) and Privacy Policies?

Website terms of service (ToS) and privacy policies are legal agreements between a company and its users that outline the rights and responsibilities of each party. They are typically accessible on a business's website, linked in the footer, and are important legal documents.

Terms of Service agreements establish the terms and conditions users must accept to use a website, online application, or service provided by a business. These agreements typically establish terms for user responsibilities, payments, content ownership, data use, limitation of liability, termination, and IP rights.

Privacy policies are legal documents that outline how a service provider collects, stores, protects, and uses personal information provided by its users. It will address other issues like cookies and tracking technology, data sharing, and user rights as well.

Both legal documents are critical for any business that provides services online since they establish trust with their user base. It is also important to make sure these documents are up-to-date on current online laws and regulations.

Why Do Websites Need Them?

Websites need these legal agreements to establish trust with their user base, protect their business from legal liability, and comply with laws and regulations.

• Establish user trust and expectations. Having a well-drafted ToS and privacy statement will establish immediate trust with users of your service. The ToS will set clear guidelines on how users can access and use your website or service and the privacy policy will reinforce the steps you are taking to protect their data. The absence of these documents will be a red flag to many online users.
• Protection from legal liability. It is important to have these legal documents on your website to protect your business against legal liability. ToS will often have a limitation of liability section to protect against things like data loss, service outages, and user-generated content (UGC). Having a compliant privacy policy will also protect against non-compliance with data protection laws.
• Compliance with laws and regulations. Global privacy laws are dynamic and often changing. Laws such as the General Data Protection Regulation (GDPR) in the European Union and the California Consumer Privacy Act (CCPA) in the US mandate websites inform users of their rights and the website's data practices. Having well-draft website agreements will make sure you comply with these laws.

Importance of Terms of Service Agreements

Terms of service agreements are important because they protect a business from legal liability, set guidelines for how users can access and use their website or service, addresses intellectual property rights, and establish trust with their user base.

Legal Protection

ToS agreements typically have language that protect the business from legal claims by limiting liability for different issues that may arise. For example, the agreement may set limits on liability for data loss or service outages that can protect the business if these occur.

Another feature of a ToS is to define the legal responsibilities of its users. This may serve to prevent lawsuits that could arise from a user misusing the service.

User Conduct Guidelines

The terms of service will establish rules for user conduct, which can also help protect the business. For example, the ToS may prohibit actions like hacking, harassment, spamming, or other illegal activities. This may reduce these activities on the platform, which will create a better service and protect the business from issues.

Intellectual Property Rights

The terms of service will normally address intellectual property rights by clarifying ownership of things such as logo, content, software code, and branding. This will restrict users from using this type of IP.

User-generated content (UGC) is also a growing feature of many websites, so the ToS will address this and clarify who owns the UGC.

Trust with User Base

Outside of legal protections, having a professionally drafted terms of service agreement will immediately establish trust with a company's user base. If a company does not have a ToS available on their website or has a poorly written agreement, users may assume the service provider is a scam and avoid using the service.

Key Terms in a Terms of Service

Terms of service agreements typically include the following terms:

• Introductory section. Introduces the company and explains how the terms may change.
• User guidelines. Outlines rules and obligations for users of the website or service.
• Intellectual property rights. This section covers IP rights, addressing the company's IP and content, as well as any user-generated content.
• Limitation of Liability A section that says the company is not liable for any damages resulting from users accessing their services.
• Termination clause. Outlines how the company can terminate their relationship with a user, and what that process looks like.
• Dispute resolution. This section states how a user and the company can resolve a dispute, including the process and the venue.
• Contact information. This section will provide contact information for the company and how users can get in touch with them.
• Payments. If the service provider collects payments, this section will address that process and how it works.
• Refund policy. If the service collects payments, it will likely address how it handles refund requests from users.

Note, depending on the service, there may be other clauses included in the terms of service agreement. The above are common sections you will find.

When Should You Update Your TOS?

Updating your terms of service agreement is important and routine. Given online businesses are often changing their service and testing or adding new products based on user feedback, you will need to make sure your Terms of Service stays up to date.

Another reason to update your terms of service may deal with the changing landscape of online laws and regulations. For example, if a new regulation is passed, a business may be forced to update their terms of service to comply.

We have written a separate article on when to update your terms of service and when to update your privacy policy.

Importance of Privacy Policies

A privacy policy is a critical website agreement for businesses that collect personal information and data from its users. The company has an obligation to its users to explain how the business collects, protects, stores, and uses this data. Not only is it legally required in new privacy laws, but it also creates trust from your users that you're taking the right steps to protect their data.

Businesses also need to comply with new laws like the GDPR and CCPA, which require their Privacy Policies to address and disclose specific data collection practices and user rights.

Are Privacy Policies Legally Required?

Privacy policies are legally required in many jurisdictions if you collect, process, and store personal data from your users. These laws were set up to:

• Protect individual privacy and data rights
• Ensure transparency in data collection and use
• Comply with data privacy laws
• Prevent data misuse and promote accountability

The General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) are two notable privacy laws that are relatively new.

• GDPR. The GDPR requires companies that collect and process personal data from individuals in the EU to have a privacy policy. It does not matter where the company is based. If the company works with users in the EU (which most online businesses can), then it is required to have a GDPR-compliant privacy policy.
• CCPA. Under the CCPA, if companies collect personal data from California residents, they are required to have a privacy policy that informs users the companies data practice and their user rights. Given most US business have scope to service California residents, they need to have a privacy policy that complies with the CCPA.

How to Make Your Privacy Policy GDPR and CCPA Compliant

Making your privacy statement compliant with the GDPR and CCPA is important. Businesses must review each of these laws and adhere to their requirements.

The best way to make your privacy policy compliant for both laws is to hire a privacy lawyer to review and update your current privacy policy, or draft a new one. There are also services online that allow you to download templates that are compliant.

Here is an article on the CCPA vs GDPR for more information.

Key Sections of a Privacy Policy Statement

A privacy policy should include the following sections:

• Information collected. Outline a list of the type of information that is collected from users.
• Reasons for collecting data. The company should provide the reasons for collecting the type of data it does from users.
• Data usage. This section should outline how the company uses the collected data.
• Storage. This section should outline how and where the data is stored.
• Security. This section should outline the security measures the company takes to protect the data it collects.
• Data retention policies. This section should outline how long the company stores the data and how it is securely wiped in the future.
• Opt-out procedure. This section should outline if a user can opt-out and what procedure they need to take.
• Contact information. This section should give contact information to users related to privacy inquiries.

If you want to see an example privacy policy, feel free to visit most websites and find a link to it in their footer.

Drafting a User-Friendly Website Terms of Service and Privacy Policy

Drafting a user-friendly ToS and privacy policy disclaimer is important because your users need to clearly understand your legal terms and policies. Having overly complicated agreements full of legalese may intimidate users and cause them to disengage with your service.

Below are some tips:

• Use plain English and not overly technical legalese
• Be transparent about data privacy policies
• Make the agreements easy to navigate by adding a linked table of contents
• Bold and highlight key points you want the users to see
• Keep it short but thorough
• Update your agreements regularly

Best Practice for Displaying on Your Website

Displaying your terms of service and privacy policy on your website is critical to establish user trust. Most users look in a website's footer to find links to these agreements.

We recommend making each agreement a separate web page that has a clean design and is easy to navigate. Add a linked table of content at the top or the side of each agreement so users can easily find and review different sections of the web page.

We would also recommend adding the date at the top of each agreement for when it was last updated, so users can see that you are actively keeping your agreements up-to-date.

Lastly, make sure these web pages are mobile friendly since many users engage with websites from their cell phones.

Common Mistakes to Avoid

Given your website agreements can create trust between your user base, it is important to make sure you do not make mistakes. Many businesses do not speak to all their website users, so getting these documents right will lead to more user engagement with your website and service.

Below are some common mistakes to avoid:

• Failing to customize to your business. Many business owners may find templates online since it is a cheaper solution than hiring a lawyer. As a result, businesses can publish website agreements that do not fit their business and leave them open to legal liability. We recommend investing in custom drafted agreements by hiring a technology lawyer that routinely works on these agreements. They will customize the terms to make sure they apply to your service or website.
• Overly complicated legal language. Overly complicated legalese can turn users off quickly, which may lead them to leave your website or not sign up for your service. Make sure the language is clear and user-friendly to attract more engagement.
• Ignoring privacy laws. Publishing agreements on your website that do not comply with privacy laws can open you up to legal liability or issues with regulators. There are penalties for non-compliance that can threaten your business.
• Omitting key information. Leaving out key information, like data practices, payment terms, and refund policies, can create issues for your business operations and open you up to legal liability. Make sure your ToS and privacy policy address everything needed.
• Vague language about user responsibilities. Being clear with users about their responsibilities is important and will protect you from legal liability and improve your service.
• Failing to update routinely. Given business models and privacy laws are constantly changing, make sure you are routinely updating your agreements to make sure you are legally protected.
• Not disclosing data sharing. If you share personal data of users with third parties, this needs to be clearly stated to avoid legal and reputational risk.

Frequently Asked Questions

Am I legally required to have a terms of service agreement?

No. You are not legally required to have a ToS on your website. However, it is recommended since this document will set the terms between your business and your users. Not having a ToS can open you up to legal liability.

How do users agree to terms of service and privacy policies?

Users can agree to your website agreement simply by opting in to use the service. This can be written in your website agreements.

Other ways you can have users agree is by allowing them to check a box to agree to your ToS and privacy policy when they sign up.

Do I need a privacy policy if I don't collect personal data?

If you do not collect personal information, you may not be legally required to have a privacy policy. However, we recommend stating on your website that you do not collect personal information.

Can I share user data with third parties?

Yes, but you need to disclose this in your privacy policy and explain who you are sharing with, why you are sharing it, and inform users of their rights regarding data sharing.

Do I need to notify users if I updated my ToS or privacy policy?

Yes. You should update your users when you update your agreements, especially if you make changes to user rights or data practices.

Conclusion

Having a well-drafted terms of service agreement and privacy policy is important in keeping your business protected and establishing user trust. Given most businesses now have an online presence, these documents are critical.

If you need help from an expert technology lawyer, feel free to post a job to receive competitive quotes to draft these website agreements. Posting is free and will save you time.