Website terms and conditions act as a contract between the visitors to your website, app or other platform and your business. As a terms and conditions lawyer, I can state without hesitation that written terms and conditions are a must for any online business. Correctly written terms are one of the most effective ways to put a stop to potential lawsuits by users.
Do You Really Need Terms and Conditions?
The answer is “yes.” There are practical as well as legal reasons:
- The Practical – Google requires a site to have a set of terms to rank highly in the search results, so you need terms for SEO.
- The Legal – Terms are used to address legal topics such as copyright, name use, logo licensing, codes of conduct in comments, product returns for e-commerce sites and so on.
The quality and application of your terms is also incredibly important. Consider the infamous case of Zappos.com and its failed terms and conditions. Zappos is one of the larger retailers online, so one would think the site would have top quality terms and conditions. It did not, at least up to 2013, when a court unceremoniously invalidated the Zappos terms. The court found two problems:
- The Zappos terms contained a poorly written arbitration clause that robbed customers of certain fundamental rights, and
- The customers were not asked to check an “I Agree” button and, thus, were not bound by the terms.
The result? The court disregarded the language in the terms, and Zappos ended up being dragged into a massive class action lawsuit over an alleged data breach that involved damage claims in the millions of dollars.
Put another way – properly written and implemented terms and conditions are incredibly important.
The Wrong Way
What about using terms generators or “borrowing” terms from another site. Oh, the lawsuits that have started over such practices.
Let’s begin with the idea of “borrowing” terms from another site. Lawyers write the terms and conditions for reputable sites, which means they also own the copyright to those terms. When you “borrow” and republish these terms, you are committing copyright infringement. What are the chances of a lawyer suing you for infringing on their work? Do you really have to ask?
And what about programs that generate template terms for you? The problem with these generators is they are so general as to be next to useless. For a set of terms to protect you from lawsuits, the language in the terms must address specific features of your site. For example, consider a website where users can upload tutorials and pieces of programming code for others to use. Issues that must be dealt with in the terms include:
- Licensing of the content to your site for exposure to other members,
- Potential ownership transfers of the content in question,
- The type of license given to other members of the site who wish to use the code in their projects,
- How copyright infringement claims will be handled,
- Warranties by users that they own the content they are uploading and said content is not the property of an employer,
- Beta testing licensing provisions for any improvements to a piece of code suggested by users on the site,
- Indemnity language in favor of your site for any legal issues that arise regarding uploaded content, and
- The use of the content in any of your marketing materials.
No terms generator is going to address these issues. In fact, a judge is likely to interpret a set of short, weak terms as an indication your overall position in a legal dispute with one of your site visitors is equally weak.
Don’t intend to launch a programming site? Well, how about a dating site? Just two issues unique to a dating site that must be carefully written into the terms include:
- Disclaimer language regarding background checks of members, and
- Indemnity language binding the members in case one member attacks another verbally or physically [a common legal issue for dating sites.].
Just launching a simple blog? Essential clauses to add to the terms include:
- “Choice of Forum” language dictating the physical location where any lawsuit must occur [puts an end to many complaints if the complaining party must travel to your hometown.], and
- The strategic placement of links to the terms to bind visitors to the site given they will just be browsing the site.
It is a mistake to view the terms for your online property as a burden. Terms represent an opportunity to minimize the possibility of being sued. A correctly written set of terms will often even give you complete immunity from certain legal claims. For example, a site allowing users to upload content can gain immunity from copyright infringement claims associated with that content just like YouTube and Facebook by including a well-written DMCA clause in the terms.
Think about that for a second – one clause that could save you from spending tens of thousands of dollars in attorneys’ fees and potentially millions in copyright infringement damages. I don’t know about you, but I would feel stupid losing that protection because the terms and conditions for my site were weak.
A correctly written set of terms is going to contain clause after clause after clause designed to limit the risk of doing business online in a lawsuit-happy world. There is, after all, a reason Apple makes you agree to such a lengthy set of terms every time you buy or update one of their products.
The Right Way
We create terms and conditions customized to the particular features of your website, app or other online property. We then provide you with guidance on the best means for binding visitors to those terms in light of recent case law, so you don’t suffer the same fate of, for instance, Zappos. Our service works as follows:
- We review your online property at no cost.
- We then provide you with specific recommendations for the terms.
- We also provide you with a flat fee quote, so you know the exact price.
- We forward a set of questions designed to clarify any unique information we may need such as your refund and return policies.
- We prepare the custom terms and then go over them with you by phone.
- You publish the terms on your site and we perform a final review to make sure everything is in order.
Terms and conditions act as a contract between you and your visitors. You should use the terms to limit your legal risk to the greatest extent possible. Contact us today to get a free review of your online property or business idea to get started.
Richard A. Chapo, Esq.