The primary reasons for having a TOU contract are:
• Protect the website owner’s intellectual property
• Manage users’ expectations
• Allocate risks of adverse effects from using your website (if any) to the user as much as possible
Look up the TOU on any popular website and you will probably find page after page of legalese. Most users end up never reading that contract, many might even be offended by its presence. I know you don’t want to be known as a company that is difficult to do business with (leave that for government agencies), but the truth is that the customer is not always right. And the big business owners of those websites know how to protect themselves, so you should follow their lead and have your own TOU.
This isn’t the place to go into the details of all the elements of a typical TOU, but here are some things to consider.
1. Protect your Intellectual Property. One of the most important uses of a TOU is to protect your intellectual property rights. You should reiterate your claim to the copyright in all materials you (or your proper agents) write and post. You should also make your registered trademarks known.
2. Disclaimer. The TOU is a good place to put your disclaimer of use (see my earlier post on that topic).
3. Cover problem situations. If you have encountered customers having the same problem over and over again, look first for a way to restructure your website or service. If you’ve tried that and you remain convinced that some people are just too dense to understand the basics, or worse that some people are simply out to harm your business, then you need to protect yourself. Write into your terms the conditions for returns and refunds, the charges for excessive customer support, hours of operation, how long it might take you to ship products, answer requests for information, or resolve problems–whatever you need in order to put the risks of bad user behavior back onto those users.
4. Force users to agree. It does not matter whether users actually read your TOU, but they should be forced to check a box that says they agree to the terms and conditions contained in it. Here is an article (in a UK newspaper, but the most of the underlying legal principles apply in the US as well) urging users to be aware of the TOUs they sign and why:
5. Two additional resources. Here is a rating service that rates and summarizes TOUs for users: http://tosdr.org. Use it to examine what other companies put into their TOUs. But don’t just copy and paste from those other TOUs to create your own. You’ll likely end up with a jumbled mess. Instead, engage an attorney or write your own either from scratch or from forms you buy online (and do look at multiple forms). Here is a possible outline for you to consider, but (here comes the disclaimer), it might not be appropriate for your specific needs, and it is certainly not complete.
• Description of service, obligations accepted by service provider
• Payment terms and conditions for return of payment
• Personal representations of user
• Rules of behavior while using the site
• Ownership of intellectual property (trademarks, copyright–original and posted materials)
• Limitation of liability and indemnification
• Dispute resolution, governing law, severability