Tips for Creating Your Website's "Terms of Use"

Keep your website's terms of use easy to understand so that both your customer and you understand your obligations.

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If your business plans to expand its online presence, you will need to determine what conditions will apply and examine some key tips for creating website terms of use or service. No matter what terms you develop, try to keep the terms easy to understand and in plain English so that both your customer and you understand your obligations. Here are some main tips on issues to think about when drafting your terms of use.

  • Tailor Terms to Your Business. Plug the words “terms of use” or “terms of service” into a search engine and a host of online templates will appear. Automated online services will offer to generate sample terms with a few clicks of your mouse. But be aware that one size does not fit all and you will need to tailor any terms of service to your particular business or industry. A website that merely serves as a passive online informational will require different terms from a site that sells goods, hosts discussion boards, and communicates directly with customers through emails, blogs, and social media. Before developing your terms of use, jot down your goals and objectives in setting up a website and what issues might crop up based on your likely online activities. Consider the nature of your business, how you plan to use your site, your expected online transactions, your anticipated interactions with customers, and possible legal liabilities that may flow from your online site. You may also want to check with your industry association to discover other common online issues in your industry to help you draft terms to address these potential pitfalls.
  • State Your Conditions of Sale. If you are selling goods or services online, you will need to include your conditions of sales in your terms of use. Spelling out these terms will avoid customer misunderstandings and potential lawsuits from unhappy buyers. Your terms should address payment, credit card use, shipping terms, refund and return policies, and warranties. You may also want to limit your legal liability to your customers and other third parties who visit your website and participate in online transactions with your business. Look into applicable state and federal consumer protection and deceptive trade practice laws to make sure your sales terms do not run afoul of legally-mandated safeguards.
  • Recognize and Respect Intellectual Property Rights. On your website, you will need to identify and protect your intellectual property rights. The design and content of your website may be subject to copyright laws while your company logo and taglines might also be protectable under trademark laws. Work with an attorney to register your intellectual property and to place appropriate notices on your site to make others aware of your ownership rights. You may also want to include language in your terms of service affirming your ownership rights and requiring your written consent for any use of your protected materials.
  • Develop a Privacy Policy. Regardless of whether or not you are collecting consumer data, your website terms should include a privacy policy in line with relevant state and federal laws. If your business does not undertake any data collection, then simply post that statement in your terms of service. Your privacy rules should identify who is gathering the information, what is being collected and how it is being shared. Provide choice to your customers, allowing them to determine whether to “opt in” or “opt out” of your collection program and to review and correct information your business has gathered. There are also important legal restrictions on data collection for children under age 13 that must be observed. You should undertake reasonable efforts to protect customer data using appropriate technological safeguards as well as training and monitoring employee handling of customer data for compliance with your policy and relevant laws. Visit the Federal Trade Commission’s website for key laws and principles that apply to online privacy policies.
  • Address Online Conduct Issues. Interacting with your customers online may be a great way to market your site and to generate customer sales. However, in the anonymous world of the Internet, some people may use your forum in ways that tarnish your company’s reputation or violate the legal rights of third parties. If your site hosts discussion boards or interactive blogs, you will need to create conduct policies for those participating on your interactive site as well as to help create a safe harbor from liability for your business under federal law. Your behavioral policy should address a broad range of issues, including showing respect to other customers and your business by not posting defamatory, offensive, or obscene materials. In addition, your terms should not tolerate user conduct that violates intellectual property laws in online postings. For example, you may have a user who regularly posts copyrighted materials, such as articles or photos, on your online forum without appropriate permission. Your behavioral code should clearly state penalties for breaching your site’s rules, such as the loss of access to your discussion board or social media page, especially for repeat offenders. You should also disclaim all responsibility for what others post on your site and assist third parties who may legitimately request the removal of legally-protected materials posted on your site.
  • Comply with Applicable State and Federal Laws. In establishing an online presence, you must comply with a host of state and federal laws from consumer protection and deceptive trade practices to privacy, data collection, and intellectual property laws. In this fast-changing environment, you may find it helpful to consult with an attorney who specializes in Internet law to aid your understanding of and compliance with these laws in developing your website’s terms of use.

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