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Why You Need a Website Terms of Use Agreement

Everyone has seen a terms of use agreement on a website, but you may not realize how important it is for your own website. Many websites prompt you to agree to their terms of use before you can register on the website or even use it. However, if you have your own website, then it is time to start developing a strong terms of use agreement so you can better protect yourself.

What Is a Terms of Use?

A terms of use is an agreement that a user must agree to and abide by in order to use a website or service. Terms of use (TOU) can go by many other names, including terms of service (TOS) and terms and conditions. Terms of use are often seen on e-commerce websites and social media websites, but it is not limited to those types of websites and should be used with any website that stores personal information of any kind. A terms of use that is legitimate is a legally binding agreement and is also subject to change, which should be noted in the disclaimer. Websites should always have a terms of use regarding user activity, accounts, products, and technology.

Different Types of Terms of Use Agreements

There are two different types of website agreements: browsewrap and clickwrap. These two can be different and will directly impact the application of a website's terms of use. It is important to know the difference between the two so you can make the most educated decision for your website.

Browsewrap Agreements

A browsewrap agreement is one that has the terms of the agreement on the website itself and are connected to the main page of the product by a hyperlink. The hyperlink leads to another webpage that will have the terms and conditions of the agreement detailed. With this type of setup, the terms do not pop up and do not require an action be taken by the user in order to continue. That means that the user is not actively agreeing to the terms linked to the page. This causes an issue because the user of the webpage must actively click on the hyperlink in order to even access the terms of use and become aware of them. This is a different way of ensuring the user agrees to the terms and it can lead to potential issues because the website is not requiring the user to take any action.

Clickwrap Agreements

A clickwrap agreement is different because it is designed to ensure that the user has a chance to see the terms of use and they must also actively agree to the terms in order to agree. This tends to be set up through a series of pop-ups on the website. With this type of agreement, the terms are actively placed in front of the user so they have to review and agree to them, which means that your website is better protected as a result. This also means that since the terms must be agreed to prior to any action being taken by the user, they can hold up better legally if they are ever needed. Of the two, clickwrap agreements are more secure and more enforceable.

Reasons to Have a Terms of Use

There are five key reasons why you need to have a terms of use agreement on your business's website. Knowing how it can protect you can help you better determine if it is the right option for you. These are the five main reasons businesses decide to develop terms of use for their websites:

  • You can mitigate liability for your website. When things go wrong, people want to find someone to blame. If you do not use disclaimer warranties on your website, then the blame could easily be put on you. If you do have a disclaimer warranty on your website, then they cannot blame you if something goes wrong. An example of this happening would be if one of your users' devices became infected with malware. Without the disclaimer, they could say it was caused by your website. Another example would be if your website was down for a specific period of time; your users may try to sue you if they needed your website to conduct their business. A disclaimer will protect you from these actions so you do not have to worry about them or deal with them and waste precious time.
  • You can define the permitted conduct for your website. In the terms of use, you can detail what users are and are not allowed to do on your website. It will define how they can use your website and the scope of the license that any of your users have in terms of your content. Depending on the nature of your website, you may even want to include terms on what users can upload or submit to your website. This makes sense for websites that allow users to post comments on content and blog posts, and especially if they are allowed to upload media files. Anything that ends up on your website is a direct reflection of your brand, so it makes sense to determine what is and is not acceptable. Also, if you allow people to use your content elsewhere, your brand will be showcased by your users and you want to make sure your brand is reflected in a positive manner.
  • Set up an indemnification process for your website. As much as you may want to, you cannot always control what your users do on your website. However, you can protect yourself against their actions in case they violate someone else's rights. For example, if one of your users decided to upload a file that violates the copyright of someone else and your website gets sued for it, you can make the user pay for all of the legal costs associated with it. While you will still need to take care of the copyright issue and make sure all legal action is taken, you will not be left with the bill that comes with it.
  • Implement limitation or exclusion of liability. A strong terms of use agreement is a great line of defense, but there are some cases that get around the provisions you have created. That is why it is important to use your terms of use as a way to also limit the amount of damage your website will incur in the process. If someone does end up taking you to court and they have found a way around some of your provisions, this will allow you to limit the amount of money they can get from you during the process.
  • Incorporate an arbitration clause. Whether the dispute is between you and a user or between two of your users, your terms of use can outline how to resolve those disputes so things do not end up in court. In your terms of use, you can require your users to handle their disputes in specific ways. This can prevent the situation from ending up in court in a place that is not close to your headquarters. While this is not a fool-proof method, you can also require that they use mediation so you can save money on court costs, or you can require that all court actions take place in your hometown.

What Should be Included in the Terms of Use?

For your website, you want to make sure you include various components that will help keep your website and business safe and secure. These are just a few of them that you need to have listed:

  • Acceptance of Terms – This section will detail to the user that by using the website and any services provided, they are agreeing to adhere to the terms and conditions set forth. It also details that the terms are a binding legal agreement and sets any age restrictions for visitors.
  • License to Use – This section will detail that the visitor has a limited right to use the website as long as they abide by the terms that are set forth in the complete terms of use.
  • Cookies – If your website uses cookies, you need to have a section that details how they are used to store information. You must also detail how users can decline these cookies by disabling them in their browser settings.
  • Acceptable Use Policy – This is the section that will provide a list of prohibited uses of the website. Some examples to include are illegal purposes, harvesting data, harassing others, using your website for users' personal gain, and more.
  • International Use and Compliance – This section will detail that the visitors are required to ensure the site conforms to any laws in their area.
  • User Accounts – If you allow people to make accounts on your website, you should include this section. It will detail that when an account is made, the user is ensuring all data provided is accurate and true and that they are responsible for their account information, including their password.
  • Modification of Site – You will want to include this section because it will detail that you are allowed to modify, change, add to, terminate, or suspend any part or all of the site at any time, even without providing notice.
  • Support or Maintenance – Unless you plan on providing it, you will want to detail that you are not under an obligation to provide any website maintenance or customer support.
  • Privacy – In this section you will detail your privacy policy if you have one in place. It will state how users' property is kept private and any circumstances where you may not be able to keep the information private. You also have the option of pointing to a separate privacy policy that pertains to your website.
  • Your Rights and Ownership – This section will detail that you own all intellectual property rights to content on the website, except for any user content, and that the visitors to the site may not use it in any way without permission.
  • Disclaimers – There are a variety of disclaimers you can use on your website and you should make sure all of them are detailed in this section. For example, this could include that the information provided is informational only, that the site is accepted as is, and that you are not liable for any promises you did not offer or intend to offer.
  • Termination and Modification – This section will detail that you can terminate the access of any visitor at any time without notice and at your discretion.

How Often Should Terms of Use be Updated or Reviewed?

Just like you should update your website content on a regular basis, you should also update your terms of use regularly. There is no set time frame that you should be reviewing your terms of use, but it is recommended that you do this every few months.

Periodic Reviews

You should perform periodic reviews to make sure your terms of use is still protecting you the way you intended it to in the beginning.

Things may change, including the laws surrounding them or your industry, and you need to stay on top of this as much as possible. Any time a law changes, you should make updates to your terms of use to reflect them. Often, this will be at times that are outside of your periodic reviews since you can never determine when changes will impact you. As a rule of thumb, your periodic checks should be done on a quarterly basis. Not only do you want to make sure that your terms of use are still making an impact, but you want to review and ensure that there are no gaps that you may have missed before. This directly impacts your business and your website, so make sure you make these checks a priority.

How to Create Your Website Terms of Use Agreement

Use our customizable website terms of use template to create a terms of use for your website in just minutes online.