Terms of Service (also referred to as “Terms of Use”) outline the conditions that must be agreed upon before using a service or product. Terms of Service Agreements can be used by almost any company. You have probably come across these after entering information to join a website in the form of a small check box and a statement that you have “read and agree to the Terms and Conditions.”

These agreements are most typically used online in the form of disclaimers for the use of websites. These agreements legally outline how the website or company will store and/or use personal data, and they outline the rights of both the user and the company. They are vital for companies to protect themselves in many cases, such as copyright infringements or disputes over the release of user information.

What Business Should Have Them

Any business or service that operates online and gets personal information and/or content from users should have Terms of Service. Terms of Service are legally binding and have traditionally held up in court. Terms of Service can prove very important if a user ever sues you. The agreement also protects your property against copyright infringement, since you can specify how the service or product can be used or shared. It is in your best interest to develop and use Terms of Service if you are:

  • An online service that collects and shares personal information. This includes everything from dating sites to software providers.
  • A mobile app developer.
  • Any software or site that collects and/or shares cookies.
  • A company with paid advertising on its website. You must then disclose product endorsements.
  • A provider of delivered goods. Your agreement will outline how payments and delivery will occur.

What to Include

The agreement details will vary depending on the service offered, but in order to be completely comprehensive and legally binding, your Terms of Service Agreement should include:

  • The definitions of important terms and words that will be used throughout the agreement. This clears up legalese for the average user and makes your agreement easy to understand and comply with.
  • User rights, which will outline the rights the user has regarding the information they give, how they are protected and what recourse they have if they feel their rights have been violated.
  • User responsibilities. This details what the user is accountable for, what actions they can or cannot take, and the proper use of the service or product. It should also explain potential consequences (e.g. being banned) of violating these responsibilities.
  • Ownership rights. Include a disclosure of how your service can be used and how content may be legally shared. Detail any copyright information as well as how copyright infringement will be handled.
  • A privacy policy that outlines the use of personal information and in what circumstances the information will be shared, as well as how this information will be stored. Disclose how secure the users’ information will be.
  • Payment information. This applies to fees regarding subscriptions, membership and other purchases. State how the payment will be collected and how payment information will be used and stored. Include any conditions of sale, such as a return policy, warranties or shipping information.
  • An opt-out or cancellation policy. Provide instructions for users on how to terminate their accounts, if applicable.

If you are unsure of what to include, contact your attorney, especially if your company deals with medical, financial or other sensitive information.