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.
