How to Write Effective Terms of Use for Your Website

People create websites for different reasons. Some merely use their sites as bulletin boards to provide information about themselves or their company. However, if you have a website that involves client interaction to download a product, buy goods or services, communicate with other users, play a game, and so forth, then your homepage should include a link to your site's Terms of Use (sometimes called Terms of Service). This is contractual language that legally protects your company by notifying customers, clients, subscribers, or other users about the dos and don'ts of how they can utilize the site.

The following is a general discussion of Terms of Use for any company that has an interactive web presence. However, depending on the particular nature of your business, you might need to add language that covers additional concerns or market realities. For example, if you sell products online, you will likely need to include additional provisions regarding delivery terms, warranties, return policies, and so forth. If your website offers services, then you should include terms that are relevant to the particular services you provide.

Review Competitor Sites

Begin by reviewing the Terms of Use featured on websites of either direct competitors or other companies in your same market space. Get a general feel for the legal concerns that their Terms of Use address and how they protect the company from those concerns. If you find language that would be useful and applicable to your website, then contact your legal counsel before duplicating any of that verbiage. As a general matter, most companies won't care if you borrow their Terms of Use language because these provisions typically incorporate boilerplate clauses whose original authorship is either inconsequential or difficult to prove. However, double-checking with your legal counsel ahead of time is always advisable.

Agreement to be Bound

The primary intent of the Terms of Use is to create a legally-binding contract between the user and the company. From the outset, your Terms of Use must make it very clear to the reader that by interacting with the website, or utilizing your company's goods or services, the user is automatically agreeing to be subject by the Terms of Use in their entirety, without modification. This is arguably the most important provision in the Terms of Use because it notifies users that they will be contractually bound. You can further confirm your users' assent by having them either check a box or press a button acknowledging that they accept the Terms of Use before they're able to continue using your site. Furthermore, if the user is an entity, then the Terms of Use should make clear that any references to the "user" also include that entity's representatives, agents, contractors, affiliates, employees, and so forth.

Prohibited Uses

Your Terms of Use should warn the user of forbidden activities. Again, while the nature of your business might require that you add additional restrictions, it's common for Terms of Use to prohibit users from:

• leasing, selling, copying, sublicensing, transferring, or assigning any information, intellectual property, goods, or services provided on the site
• using the site for any illegal purpose
• gaining unauthorized access to the company's data or the data of other users
• altering, modifying, adapting, reverse engineering, decompiling, disassembling, or hacking the company's intellectual property
• altering or modifying another website to falsely imply that it is associated with the company's website,
• using or exporting the company's information, products, or services in violation of U.S. export laws and regulations
• violating anyone else's legal rights (for example, privacy rights) or any laws (for example, copyright laws) in the user's jurisdiction
• using the website or the company's services to transmit content that could be deemed unlawful, threatening, harassing, racist, abusive, libelous, pornographic, vulgar, defamatory, obscene, indecent, or otherwise inappropriate, including any messages constituting or encouraging criminal conduct
• breaching, or attempting to breach, the website's security systems
• enabling third parties to violate the Terms of Use, and
• (if legally required) failing to ensure that all end users of the site are at least 18 years of age or older.

Service Interruptions and Updates

Any website can suffer either scheduled interruptions (for maintenance and upgrades purposes) or unintended shutdowns (for whatever reason). The Terms of Use should give the user notice of these possibilities and offer your company's policy on these issues, whether it be a commitment to notify the user prior to any interruptions or to restore service within a certain time period. You should also include contact information for your company's help desk in the event that the user needs to report a service issue.

Term, Termination, and Survival

The Terms of Use should state that the term of the agreement created between the user and the company begins the moment the user commences interacting with the website or uses any of its goods or services; the contractual relationship ends when the user is no longer availing itself of the site. However, certain provisions in your Terms of Use must last indefinitely. Here is a sample termination provision, specifically tailored for websites:

"This Agreement shall be effective as of the date (the "Effective Date") the User accepts the terms herein or first accesses, downloads or uses any of the services or information (collectively, the "Services") on the site and shall remain in effect for so long as the User uses or accesses any of the Services (the "Term"). Upon termination of the Term, the User shall no longer be permitted to use or access the Services. The terms herein that contemplate obligations after the Term, including but not limited to [Indemnification, Disclaimer, Limitation of Liability, Controlling Law and Severability, and Confidentiality], shall survive termination."

Note that you will have to replace the bracketed language above with the applicable headings of the related sections in your own Terms of Use, together with any other sections that you'll want to enforce after the termination of the agreement.

Subscriber Data and Legal Compliance

The Terms of Use should instruct the user to ensure that all of the information it submits or transmits fully complies with the law and specify that your company won't be liable whatsoever for the user's misuse of its data. The company can also declare the right to revoke or restrict the user's access to its website, products, or services in the event that the user violates the Terms of Use or any applicable law.

The Terms of Use should require the user to make representations indicating that they are either the exclusive owner of their data or have the proper licenses or consents to use the data, and that your company will not be at risk of infringing any intellectual property rights of third parties.

Confidential Information

Make it clear that all of the information the company provides on its website must by treated with strict confidentiality. For more information on confidentiality provisions, see Sample Confidentiality Agreement (NDA).

Indemnification and Limitation of Liability

In the event that the user violates any of the Terms of Use or applicable laws, then it must be responsible for indemnifying the company for any losses or damages the company incurs as a result. Furthermore, feel free to state that your company will not be held responsible for more than $[insert dollar amount] in connection with any claim involving the user. For additional guidance regarding indemnification provisions, see Indemnification Provisions in Contracts.

Amendments

Amendments to the Terms of Use should only be effectuated by the mutual written consent of the company and the individual user.

Notices

Include a notices section so that users can contact the company, for whatever reason. You can even provide specified contact information for different consumer issues. For more discussion on the importance of notices provisions, see Why Your Contract's "Notices" Provision is Vitally Important.

Reference Your Site's Privacy Policy

Your website should have a separate link to your company's privacy policy, which describes how your company utilizes and protects user data. See What to Include in Your Website's Privacy Policy for further discussion.

Miscellaneous Provisions

Because the Terms of Use effectively act as a binding contract, you must also incorporate standard provisions that appear in most agreements. This includes the amendment and notice provisions discussed above, as well as your desired governing law. For more information on boilerplate miscellaneous provisions to include at the end of your Terms of Use, see Common Boilerplate Provisions in Contracts.