Terms and Conditions are a set of rules that a user must agree to in order to use your website, mobile app, software, or other services.
Creating a Terms and Conditions agreement is essential for any business that wishes to protect itself from users who may try to misuse or abuse your services.
1. What is a Terms and Conditions Agreement?
A Terms and Conditions agreement is a written set of rules and regulations between two parties, the User and the Company, that the User must agree to follow in order to use the Company’s website and services.
This document keeps companies safe by informing users of their policies.
A simple terms and conditions agreement will identify the following basic elements:
- Company: the name and address of the Company providing the services or product
- Website: the Company’s website or application that the User will be accessing
- Service: what service or product the Company is providing
- Rules: the rules and regulations for using the service or product
- Acknowledgement: an acceptance and acknowledgment by the User to abide by the rules and regulations when using the service or product
The Company can tailor the rules and regulations, or “terms of use”, according to the service or product it provides and its specific needs. It can be posted on the Company’s website either as a browsewrap agreement or a clickwrap agreement.
| Browsewrap Agreement | Clickwrap Agreement |
|---|---|
| Terms of Use are posted on website or hyperlink | Terms of Use are posted on website or hyperlink |
| Implicit Consent - By using the service or product, user agrees to abide by the Terms of Use | Explicit Consent - User must click on an “OK” or “AGREE” button to use the service or product |
| User must have actual or constructive knowledge of the Terms of Use | User must have reasonable notice of the Terms of Use |
This document is also known by these other names:
- Terms of Use
- Terms of Service
- User Agreement
- Statement of Rights and Responsibilities
- Disclaimer
- TOU
- ToS
- TOS
- TOC
Where you place your Terms of Service on your website can affect its enforceability.
2. When a Terms of Use Agreement is Needed
Any internet service provider, like e-commerce, that stores user’s data needs a Terms of Use.
While Terms and Conditions are not required by law, any website, especially e-commerce or social networking websites or applications and any website or internet service provider that stores a User’s personal data, should consider having Terms and Conditions.
Terms and conditions protect the Company and act as an instruction manual for its website. They allow the Company to explain things related to its service or product, including, among other things:
- how purchases, payment, and returns are handled
- ownership and use of content and intellectual property
- how Users must conduct themselves, including any prohibited behavior
- limitations on liability and disclaimers
- the Company’s privacy policy
Do I need a privacy policy?
A privacy policy is a separate policy from the Terms and Conditions. It describes the way a Company collects, uses, maintains, and discloses personal information and data collected from its customers. Most countries require any website that collects and stores any personal information from its customers to have a privacy policy. California, in particular, has the California Online Privacy Protection Act (CALOPPA), which extends to any Company that collects personal information from a California resident.
Because of the reach of CALOPPA and other laws, all websites should consider having a privacy policy.
3. Why You Need Terms and Conditions
Not having the protection of a Terms of Use can lead to lawsuits for many online companies.
Without a Terms of Service Agreement, the Company may be limited in how it can run its website or become liable for violating User’s rights.
Here is a list of some of the preventable suffering using this document could help avoid:
| COMPANY | USER |
|---|---|
| Can’t disconnect Users for bad behavior | Harassed by disruptive user |
| Can’t use User’s contributions or personal info | Contributions or personal info used in unexpected ways |
| Can’t regulate fraudulent accounts | Scammed by a fraudulent account |
| Can’t regulate fraudulent accounts | Not sure if Company content can be used |
| Liable for any misinformation on the website | Wrongly relied on information on the website |
| Unable to develop and grow business | Unable to promote personal brand |
4. Common Uses for This Agreement
Almost every website or application that provides a service or product has a Terms of Use Agreement.
Here are some examples of websites and apps that use one:
- E-Commerce Company – Ebay, Amazon, Target, Gap
- Social Media Website or Application – Facebook, Instagram, Twitter, Snapchat
- Search Engine – Google, Yahoo, Bing
- Website or Application Providing a Service or Product – YouTube, Apple, Uber
- Gaming Website or Application – Playstation, Pokemon Go, Candy Crush
5. What Should be Included in Your Terms and Conditions
Make sure to include the correct information when you create a TOS.
A simple Terms of Service should generally have at least the following:
- Who is the Company providing the service or product
- What is the service or product provided by the Company
- Where is the Company’s website
- When will the agreement terminate
- Why might the User not be granted access to the website
- How does the User agree to accept the Terms of Service
Your Terms of Use should be published somewhere on your website that is easily accessible to your Users.
It may also include the following provisions if they apply to your website or application:
General Policies
- No Representations – the Company makes no representations about appropriateness or availability of the website in other countries
- Minors – minors are not permitted to use the website or must first receive permission from a parent
- Purchasers and Payment – how purchases, billing, and payments on the website will be made
- Refund and Return Policy – if and how Users can return products or receive a refund
User Representations
- Registration – User promises that all the information provided at registration is accurate and will be updated if necessary
- User Name – Company can change a User name if deemed inappropriate for any reason
- User Content – User owns or has licenses to any contributions, and the contributions do not infringe on any intellectual property
- Contribution License – User grants Company a license to use contributions in any way
- User Reviews – guidelines for User reviews
Other Media
- Mobile Applications – license and terms specific to the mobile app
- Social Media – policies regarding linking social media accounts
User Behavior
- Submissions – any User-submitted questions, ideas, or information about the website can be used by the Company as they like
- Prohibited Activities – User cannot use the website for certain activities
- Electronic Contracting – User agrees to the Terms of Use with any electronic submissions
- Electronic Signatures – Users can transmit electronic signatures
Company Rights
- Intellectual Property – all content on the website and trademarks, service marks, and logos are owned and licensed by the Company, and provided “as is”
- Third-Party Websites – the Company is not responsible for any third-party websites that it may link to
- Site Management – the Company may monitor and remove content from the website
- User Data – the Company may retain certain personal data provided to the website
Company Policies
- Privacy Policy – reference and link to any privacy policy the Company may have
- Copyright Infringement – how Users may inform the Company of any infringements
- Counter Notification – how Users may inform the Company of content User believes was wrongly taken down from the website
Company Safeguards
- Disclaimers – any disclaimers by the Company regarding the contents and use of the website
- Limitations on Liability – any limitations on the liabilities of the Company
- Indemnity – User will indemnify the Company in certain situations such as lawsuits arising out of User contributions, User’s use of the website, or User’s breach of the Terms of Use
- Corrections – Company may make corrections to the website
About the Agreement
- Term and Termination – how either party can terminate the agreement
- Modifications – Company can make modifications to the Terms of Service
- Disputes – governing law and how disputes will be handled
- Notices – where to send notices
- Contact Info – how to contact the Company
- Miscellaneous – legal speak regarding the agreement