Terms of service are a set of guidelines and rules that must be honored by an organization or an individual if they want to use a certain service. In general, the terms of service agreement is legally binding, but if it violates some law on a local, or federal level it’s not.
Terms of service are subject to change and if they do change, the person or the company providing a service needs to notify all the users in a timely manner.
Websites and mobile apps that only provide their visitors with information or sell products usually don’t require terms of service, but if we are talking about providers that offer services online or on a site that will keep the user’s personal data, then the terms of service agreement is required.
Some of the broadest examples where the terms of service agreement is mandatory include social media, financial transaction websites, and online auctions.
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What is a terms of service agreement?
Although the terms of service page might be the most boring place on your site, you still need to have it. On this page, your visitors can quickly learn the rules for using the website. They will know what’s expected of them and what they can expect from you.
There are no real legal requirements for an outline of the terms of service page, but there are a lot of benefits to getting out of one. Both consumers/visitors and the business will get various benefits with the greatest focus on safety.
Not only will you be able to protect your business from any lawsuits made by visitors who harmed themselves in some way, but a business can also protect all the original content located on its website and claim all the rights for it.
For example, when e-commerce businesses are facing legal lawsuits in court, the court always looks at their site and looks for the terms of service page, so that they can decide what the contractual terms were during the moment when the two parties interacted.
A lot of businesses keep these potential suits in mind when they are creating a terms of service page.
Why do you need terms of service?
All websites and mobile applications should have a terms of service page, regardless of whether they are extensive or not. With this approach, website and app owners will drastically reduce liability.
Given the fact that there are no options to control who visits your website or uses your app, you cannot control how people use the information or how they interpret it.
In most cases, the terms of service page on a website is a way of preventing many potential and unexpected claims that might be made against that site, because the visitors use the site or access it in a way that is frowned upon.
As we mentioned before, the use of a website may be in the form of receiving a service or goods or using some information located on that site.
Terms of service are a must-have for protecting websites and their owners from being sued when the user is using the services of the site and suffers some sort of loss.
Through terms of service, a business can explain how their services are used and give the customers a necessary heads-up so that they know what to expect in the future.
Yet another example of terms of service is when a site offers products.
In these cases, the terms of service page should explain how the goods get delivered, how the products are used, what they are meant for and this is how the seller can protect the organization from being sued if the buyer misuses the products.
Terms of service and the law
A business organization needs a terms of service agreement on its site while making sure it is also included within customer contracts. It’s important to make this link and show it to customers so that they understand everything clearly.
It is also very important to include an additional step where customers can confirm that they’ve read and that they agree with your terms of service.
Additionally, for all organizations that offer services or products online, no matter where they are located, it’s important that their terms of service are compliant with E-commerce Regulations and Consumer Information Regulations.
On top of that, you should make sure to check the Sale of Goods and Supply of Services Act of 1980 to avoid any legal difficulties and ensure the safety of your business.
When it comes to Australia, for example, websites are not allowed to misrepresent themselves. The information located on a site should not be deceptive or misleading in any way when talking about services or products. This is how a website can comply with consumer law in Australia.
There have been a few cases where the law sided with the customers because the terms of service page was simply too large and the court decided that it was very unlikely that anyone would have the time or patience to read the whole thing.
A different case where terms of service were questioned is where a major retailer didn’t put them in a visible spot. This is also very important to keep in mind when placing a terms of service section.
What to include in the terms of service?
Properly written terms of service need to serve as an instruction manual for visitors on how they can do business with a certain organization and they must offer detailed instructions for all situations, while at the same time being clear.
The terms of service must explain perfectly what the agreement between the business and the consumer is.
Additionally, it should also talk about what happens when a certain part wants to quit the business arrangement or is simply unable to continue with the deal.
This can save a lot of money in advance and help avoid various disputes when the customers or the business don’t want to take responsibility for what they agreed on.
From website to website, the terms of service page can be different, but in general, these are some of the most important issues that need to be addressed:
- A clear statement that points out what services or products will be given to customers.
- Specifying payment terms, options, and when the customer is obligated to make the payment.
- Warranties or guarantees that are offered with the products or services.
- Deadlines for delivering products or services with additional queries on the related subject.
- Explaining what will happen if the customer or the organization doesn’t pay/deliver the services or products. Clarifying what happens if one of the parties wants to stop the business relationship.
- What law is governing the contract between the two parties.
- How the terms of agreement affect the consumer and how they can get out of it and in what period of time.
Where to display terms of service?
One of the most important things about your terms and service is the location where you will put it.
There are a lot of examples where businesses weren’t able to rely on their terms of service simply because it was put somewhere where nobody could find it. They had a well-written document, but it did no good, simply because nobody read it.
Create a page
First of all, your business website should have a dedicated page that is made for your terms of service document only.
It should be located alongside all of your other pages and you should name it terms of service so that there is no room for confusion. Make sure that a visitor can find your page easily if he or she wants to.
Make it pop out
When someone is trying to buy products or hire your services, make sure that your terms of service appear somewhere at the beginning of the buying process.
People will forget about this important document and you need to show it to them directly so that they can read it before they continue with the purchase.
Create a scroll button that prevents them from continuing forward until they’ve scrolled through the whole document. This is how you will make sure that they read it, and if not, it’s their responsibility for not doing so, and you will not be held accountable.
How to enforce terms of service?
One of the most important things when it comes to making terms of service enforceable and valid in a court of law is to make sure that there is solid evidence that proves that a customer has agreed to the conditions of your terms of service.
You must prove that a user has understood and read your terms of service document and decided on his/her own to agree to it voluntarily.
On top of that, it is also important that the user was aware of your terms of service document before he or she hired your services or bought a product from you.
Here are some of the things you can do to validate your terms of service and improve the chances of it being enforceable in court.
Make sure it’s easy to understand
One of the factors that might be very important in a court of law is whether or not the customer has read the terms of service on your website. This means that it should be placed somewhere where everyone can see it and make sure that it’s impossible to go around it.
On top of that, it should be written in a language that everyone can understand and kept as short as possible. All of these things improve the chances of people reading the document.
On top of that, all of these things give you leverage in court, as they show that you made an effort to help visitors read your ToS and comply with it.
Obligate users to comply
The more times your visitors are required to comply with your terms of service and agree to it, the better the chances are for it to be enforceable.
Make sure that you explicitly ask the user to agree at the initial step of the buying process and then follow up with one or two more steps where they are required to do this as well.
It’s important not to push it too far or you might turn away potential customers. Create a business and regulation balance, so that you don’t fail in the end. You won’t be able to make your TOS enforceable by just putting a terms of service link somewhere on the bottom.
Make sure that the traditional contract complies with your terms of service
Even if you are able to follow all the guidelines with your terms of service, you still won’t ensure it’s enforceable if it doesn’t comply with traditional contract rules.
This is why apart from everything else, you still need an attorney to look at your whole TOS and make sure that no traditional rules are broken.
Simply put, these contract rules are stronger in court and all of the things written in your document won’t matter if the document itself does not honor these rules.
Give consumers the option to say “no”
If you force people to say yes, without giving them the option to reject your terms of service, it won’t stand up in court. The reason for this is quite simple, this proves that the customers didn’t agree to anything voluntarily and this discredits your document right away.
Inform every one of your ToS updates
Terms of service updates are a normal thing and when you make changes it’s essential to point out the date when they were made so that you always have insights into which version was active at which date.
Also, make sure that you notify all of your old customers of the update, show them the changes you’ve made and ask them if they want to consent to the new one.
Sample free terms of service template
This generic terms of service template will help you see how everything we talked about so far comes together to form a legal agreement. Keep in mind that this is just an example terms of service template and does not cover many of the important topics.
Generic Terms of Service Template
Please read these terms of service (“terms”, “terms of service”) carefully before using [website] website (the “service”) operated by [name] (“us”, ‘we”, “our”).
Conditions of Use
We will provide their services to you, which are subject to the conditions stated below in this document. Every time you visit this website, use its services or make a purchase, you accept the following conditions. This is why we urge you to read them carefully.
Content published on this website (digital downloads, images, texts, graphics, logos) is the property of [name] and/or its content creators and protected by international copyright laws. The entire compilation of the content found on this website is the exclusive property of [name], with copyright authorship for this compilation by [name].
The entire communication with us is electronic. Every time you send us an email or visit our website, you are going to be communicating with us. You hereby consent to receive communications from us. If you subscribe to the news on our website, you are going to receive regular emails from us. We will continue to communicate with you by posting news and notices on our website and by sending you emails. You also agree that all notices, disclosures, agreements, and other communications we provide to you electronically meet the legal requirements that such communications be in writing.
By visiting this website, you agree that the laws of the [your location], without regard to principles of conflict laws, will govern these terms of service, or any dispute of any sort that might come between [name] and you, or its business partners and associates.
Any dispute related in any way to your visit to this website or to products you purchase from us shall be arbitrated by state or federal court [your location] and you consent to exclusive jurisdiction and venue of such courts.
Comments, Reviews, and Emails
Visitors may post content as long as it is not obscene, illegal, defamatory, threatening, infringing of intellectual property rights, invasive of privacy, or injurious in any other way to third parties. Content has to be free of software viruses, political campaigns, and commercial solicitation.
We reserve all rights (but not the obligation) to remove and/or edit such content. When you post your content, you grant [name] non-exclusive, royalty-free and irrevocable right to use, reproduce, publish, modify such content throughout the world in any media.
License and Site Access
We grant you a limited license to access and make personal use of this website. You are not allowed to download or modify it. This may be done only with written consent from us.
If you are an owner of an account on this website, you are solely responsible for maintaining the confidentiality of your private user details (username and password). You are responsible for all activities that occur under your account or password.
We reserve all rights to terminate accounts, edit or remove content and cancel orders at their sole discretion.
Displaying terms of service on your website or mobile app is a great way to inform visitors about their rights, guidelines, and rules for using the website or mobile app.
This agreement is very important and may be used in a court of law if a company is facing an expensive lawsuit, or when it needs to pursue a visitor because they have damaged the company’s property in any way by disobeying the guidelines and rules stated in the terms of service.