Although it’s likely the most boring part of your website, having a well-thought-out Terms of Use page for your company’s website is a smart move. Your Terms of Use page sets the rules for your company’s website, and going without one opens your business up to a number of unnecessary risks.
Also known as “Terms and Conditions” or “Terms of Service,” your Terms of Use function as a legally binding agreement between your business and those who use your website. As such, your Terms of Use protect your company from liability by formally notifying users of the rules of your website and how your website’s content may, and may not, be used by others.
While you should work with us as your Family Business Lawyer™ to help create your Terms of Use, here we’ll discuss the basics of what these agreements should include and why they are so important. Keep in mind that depending on your specific business and whether or not you sell products or services online, your Terms of Use agreement may need to include much more expansive provisions than those covered here.
Why You Need Terms of Use
While it’s not required by law, having a Terms of Use agreement is a must for any business with an online presence—website, blog, mobile app, or other web platforms—even if you are not actually selling goods or services online. This is especially true for sites with interactive features and those that allow users to post their own content, make comments, or share your content via social media.
Your Terms of Use establish the rules for access and use of your website, thereby helping to shield your business from legal liability due to harmful actions and abuse by your users, as well as protect your content and other intellectual property from unauthorized reproduction. Common examples of abuse by users include posting defamatory content, spamming other users, uploading illegal content to your site, and stealing your content.
Note that if you collect personal data from your users, you are required by law to have a Privacy Policy, which is another web-based agreement we’ll discuss more in-depth in a future post. As you’ll see below, some websites include the Privacy Policy within the Terms of Use, while others make it its own stand-alone page.
What Elements To Include In Your Terms of Use
Although the specific language and provisions of your Terms of Use agreement will depend on the specifics of your business and the nature of your web offerings, some common elements contained in a typical Terms of Use include the following:
Ownership of content: This specifies who owns the content that is included or shared on your site, and outlines how users may, or may not, use or share your content. Make sure to state if you own intellectual property rights, such as copyrights or trademarks, to any of the site’s content.
Limit liability: This is a disclaimer alerting users that you are not liable for any errors or inaccuracies in your web content. And if you allow users to post content or comments, you should state that you aren’t liable for any illegal, abusive, or defamatory posts generated by third parties.
Privacy policy: If you collect any personal data from your users or customers, such as email addresses or credit card information, you must include a privacy policy that outlines what data you collect, how it's collected, and how you plan to use and protect the data. Again, this is the only element of your Terms of Use that you are legally required to post, and you may choose to include it within your overall Terms of Use or run it as its own separate page.
Governing law: This states where your business is located and specifies which law (state or country) you are governed by in the event you are taken to court.
How To Create Your Terms of Use
As tempting as it may be to simply copy and paste terms from another company’s website, this is a bad idea. For one, you may be liable for copyright infringement, but more importantly, if you copy terms from another company, they likely won’t properly protect your business if you wind up in court.
While many Terms of Use provisions are pretty standard, others can be quite specific, depending on your industry and what types of information you collect, share, and the potential liability you face. Every company faces its own unique risks, so you should never expect that copied terms will adequately protect your business and its unique characteristics from all potential threats.
Given this, you should have a lawyer like us who’s familiar with your particular industry and business create a customized Terms of Use agreement for your business—or at the very least, have us review any terms you may have created on your own or with the help of another lawyer. That said, it’s perfectly acceptable and even recommended for you to review terms from other businesses like yours to get a sense of the type of elements you need to include in your own.
How To Implement Your Terms of Use
The primary purpose of your Terms of Use is to create a legally binding agreement between users of your website and your company. Your Terms of Use should make it clear that by using your website, the user is automatically agreeing to be bound by the Terms of Use. In short, users must be given notice of your terms and then agree to them.
You can obtain a user’s agreement to your terms in a few different ways. In the first, sometimes known as the “Browsewrap” method, you simply post prominent links to your Terms of Use page on your homepage and other sections of your site. The user is not required to take any action by checking a box or clicking a button. Although this is the easiest method, it’s also less likely to be upheld in court.
In the second method, also known as “Clickwrap,” you obtain the user’s assent by having them check a box or click a button to confirm they’ve read and agree to accept the terms before they can use your site. This is the most effective way to establish an enforceable legal agreement between you and the user, as the court is more likely to find that an agreement exists if the user has to take some kind of action.
Finally, you may also choose to obtain a user’s assent by having them agree to your Terms of Use during your customer registration process or when they want to gain access to a certain site function or feature.
Enlist Our Support To Create Your Terms of Use
Even though it might not seem like a big deal, the Terms of Use agreement for your website is just as important as any other legal agreement used by your business. And for this reason, you should work with us, your Family Business Lawyer™, who will create your Terms of Use or review any existing agreement you may have, even if it was drafted by another lawyer.
Chances are that few people will even bother to read your Terms of Use, but should something go wrong, and you find yourself in court, the fate of your business could hinge on this one boring agreement, so don’t take any chances. Contact us, your Family Business Lawyer™ today to schedule your appointment.
We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.