In a previous post, I talked about the importance of website Terms of Use or Terms of Service (TOU) Agreements and ways to help make yours more enforceable.  This article will cover five key sections that should be in every TOU.  The list is not exhaustive, and depending on your business you may require many, more specific provisions.  Also, interpretation of these issues varies by state.  Nonetheless, these will give you a good start.  You should consult an attorney to review the TOU that you have in place or to draft a new one for you including the precise language needed to give your business maximum protection.

1.     Disclaimer/Limitation of Liability

You will want your agreement to limit your liability for the user’s use of your online product or service.  Of course, you cannot simply put a provision in your TOU that limits all liability, but there are certain categories of damages that you may be able to limit by contract.  Consult an attorney for more detailed information.

2.     Warranty

You make certain promises about your product or service to your customers.  That is good and sensible business practice.  There are also certain warranties provided for by law.  However, there are certain limitations you may want to place on those warranties through your TOU and you should do so to the extent permitted by law.  These must be clear and conspicuous to your customers, so consult an attorney to draft them for you.

3.     Privacy Policy

The importance of this provision cannot be underscored.   This section should disclose the way you gather, manage, use, and disclose a customer’s data.  There are state and Federal laws that mandate the way you use (or don’t use) this data, and disclosing details about that information in your TOU is essential.   It also gives your users a sense of security that is important to maintaining your client base.  Sometimes, the privacy policy is even separate from the TOU.

4.     Intellectual Property/Copyright

You must have a provision detailing how you will handle copyright issues.  If one of your users suspects that you or another user is infringing their copyright, you must set out a specific procedure for them to follow to advise you of the problem.  This provision may seem less relevant to certain lines of business, but nonetheless it is extremely important and an attorney will be able to explain how it might apply to your business.  You should also reserve the right to remove user’s content that allegedly infringes another’s copyright without prior notice and at your sole discretion.

5.     Controlling Law/Jurisdiction

You should include a provision which identifies the court or other type of jurisdiction where all claims, legal proceedings, or the like must be filed.  This will allow you to defend any future lawsuit on your home turf.

This article is not intended to establish an attorney-client relationship with the reader and is for informational purposes only.

Junilla Sledziewski © 2013