poster
For Startups

Terms of Use that your users will actually read

Let’s talk about Terms of Use, how to write them and why you need them in the first place. 

P.S. There is a nice & useful surprise at the end of this article.

Most users do not read the Terms of Use. According to a recent survey  97% of people agree with legal terms and conditions without reading them

There are plenty of reasons not to read T&Cs:unclear and complex language, a lot of unnecessary information and unknown legal terms, the document’s length and lack of understanding why someone has to read it.

Whereas in reality it’s quite an important document that serves a clear purpose such as: 

— protect your company from legal risks

— inform your customers about functionality of the product

— protect your company from copycats

Let’s take a closer look.

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1. What are Terms of Use?

Terms of Use is an agreement between the company that offers the product/service and the user. Unlike general written contracts, it is not signed by both parties. Instead, a user must first consent to it (by clicking on the agree button, putting a tick, etc) prior to the use of services. Only then it becomes legally binding.

The Terms of Use explain how to use your product or service, set the rights and obligations for both parties and indicate the liability for violations. The document allows to establish the rules clearly and inform users about them. 

So if, for example, someone copies your websites or uses your data without consent — you have the recourse to keep them accountable. At the same time, if your platform works with independent contractors — the Terms of Use could limit your liability before customers and make freelancers legally responsible for their actions.

In addition, Terms of Use could include different policies — Privacy Policy (here you can find our recommendations on how to prepare this document for your website or mobile app), Cookie Policy (read more here), Refund Policy etc.

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2. Are Terms of Use required by law or it’s an established business practice?

While Terms of Use are generally not required by law, it is crucial to protect your legal interests.

The obligation to make users aware of the rights is found in the EU legislation on e-commerce and Data Protection Regulations (GDPR). The latter obliges the obtainment of separate consent for the processing of personal data. Given that Privacy Policy in whole or in part can be incorporated in the T&Cs — it makes their creation also necessary. 

Another reason to prepare this document is well-established business practice. If your website connects payment systems, or your mobile application/game is to be submitted to the App Store, Google Play or on Steam— in all of these cases, the platforms will require T&Cs. Otherwise, the publication and the payment systems connection will not be possible.

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3. What should be included in your Terms of Use?

3.1. Preamble

Usually T&Cs should start with the preamble (introduction). There you need to indicate what products or services are offered to the user and what’s T&Cs are going to cover.

At this point you could also add different disclaimers. For example, for products/service operating in regulated industries such as e-health  you might want to indicate at the very start that the service does not provide any medical advice.

It is recommended to put disclaimers at the beginning of your T&Cs. The rule of thumb is putting most important information at the top of the document. Users rarely read the web pages word by word; instead, they scan them. The further you place important information such as disclaimer, the lesser the chance that the user will read it. 

3.2. General Provisions

In this section, you have to indicate that Terms of Use is an agreement that could be unilaterally changed by the company. It is also worth placing information that the user should periodically re-read T&Cs in order to keep up with the latest version and notify users when changes are made. 

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3.3. Legal model/Services

Describe your product functionality simply, as for a layperson. Namely, start with the beginning of the user journey, registration, order placement and purchase. This section should be written using thestorytelling technique; outlining all details on a step-by-step basis.

3.4. Payments

Here you should describe the possible payment methods. For example it can be a one-time payment or a subscription model (one-time). You should still fill out this section even if your product is free of charge and indicate what product features are for additional fee, if relevant. 

3.5. Liability

It constitutes one of the most important sections of the T&Cs. In practice, companies frequently point out that they are not liable for the negligence or other torts committed by the contractors and third parties that use their products. Usually companies Highlight that they are not responsible for losses incurred by users using information provided on the website.

Because of its importance, this section should be carefully drafted with the lawyer. Some of the provisions might be held unenforceable if drafted incorrectly or found misleading. 

If you are interested in getting your personalised Terms of Use, Legal Nodes will be happy to help. Here you can book a free call to start.

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3.6. User Conduct

In this section users agree not to violate your company’s intellectual property rights. Also, not to damage, disable or overburden the website as well as not to make attempts to gain unauthorised access to it. Here you could also specify how user profiles can be blocked or suspended in case of any violations. 

3.7. Miscellaneous, resolving disputes and relating documents

At this section you can attach links to other policies that constitute a part of the Terms of Use - Privacy Policy, Cookie Policy, Refund Policy and so on. If such policies are not required by the business model, they can be incorporated directly into the T&Cs without creating separate documents.

Dispute resolution is another important point. It is usually recommended to prescribe the user and the company should attempt to resolve any disputes by negotiations first. In case that is not possible, indicate a court or an arbitration to which the dispute should be referred to.

In addition, it is recommended to specify that the company could cancel Terms of Use at any time, prepare and publish a new edition of the document and/or its parts, or stop providing services at all.

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It is recommended to use the above structure when it comes to drafting your own T&Cs as it is based on the best practices. 

However, we understand that drafting from scratch may be a daunting task. So, Legal Nodes has prepared a free template! All you have to do is leave an email and get it delivered straight to your inbox. 

If you would like to receive support with customising Terms of Use or any other website documents - Legal Nodes will be happy to provide assistance. You can book a free consultation here as a good starting point. 

Hope you found this article useful! Let us know at hello@legalnodes.org

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