At the broadest, “terms and conditions” refers to the obligations, rights, and limitations written and found in any contract. Thus, in a real estate purchase agreement, among the terms and conditions are that the buyer must pay the purchase price, and the seller must transfer title to the property.

However, “terms and conditions” has a more specialized meaning in the software and internet sectors. In those sectors of the economy, Terms and Conditions are written contracts that legally govern and limit the use, by consumers and end-users, of websites and content. Terms and Conditions are also necessary with any software product sold. Again, software Terms and Conditions are written contracts that legally govern and limit the use of the software. Terms and Conditions also go by other names such as “Terms of Service Agreement,” “Terms of Use Agreement,” and “End-User Licensing Agreement.” Every business that operates on the internet or provides software-as-a-service (“SaaS”) needs a solid and enforceable set of Terms and Conditions written by an experienced Terms and Condition Lawyer.

While there are certain overlaps, the type of business and software will determine what needs to be in your Terms and Conditions. So, SaaS businesses will need proven and knowledgeable SaaS Attorneys to tailor specific Terms and Conditions for the software service being provided. Examples might include provisions with respect to limitations on warranties and damages and hold harmless provisions. An Internet Terms and Conditions Law Firm should be retained for the unique needs of internet businesses and websites. Examples here might include consumer uploading of copyrighted or trademarked content, user-to-user interaction rules, and terms of cancellation of user accounts. If you need a Terms and Conditions Law Firm, call Revision Legal at 231-714-0100. We are internet and SaaS attorneys with proven experience with IP protection, contract law, and complex litigation. We are lawyers specializing in internet law.

Why Do You Need Legally Enforceable Terms and Conditions?

First and foremost, you need Terms and Conditions to protect your business. Take, for example, limitations and rules for user uploading of intellectual property. If your Terms and Conditions do not adequately limit such content uploading, your business could be held liable for contributory infringement. You also want to limit your liability, the warranties — both contractual and implied. You want to select the forum and venue if a legal dispute is filed with courts or arbitration firms. There are many other protections that must be included in your Terms and Conditions.

Why Do You Need a Terms and Conditions Lawyer to Craft Your Terms and Conditions?

It is true that generic and cookie-cutter Terms and Conditions are available on the internet. Maybe those are good enough for small and startup websites and SaaS businesses. But, at some point, you will need a legal professional to tailor your Terms and Conditions to your actual business model. The dangers of using cookie-cutter Terms and Conditions include failure to include necessary provisions and unwittingly including provisions that injure the legal protections that Terms and Conditions are supposed to provide for your business. You also need legal advice and counsel when making choices between alternatives. For example, should you allow a consumer legal dispute to be filed in a civil court or limit such to arbitration proceedings? The latter sounds good, but experience has shown that arbitration proceedings can be more costly since many States have enacted laws requiring the business to front the arbitration costs.

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For more information, call Revision Legal’s experienced internet attorneys today for assistance. You can contact us through the form on this page or call (855) 473-8474.

Enforceability: What Makes Terms and Conditions Legally Binding

A Terms and Conditions agreement is only as valuable as its enforceability. Courts across the country have consistently distinguished between “clickwrap” agreements — where users must affirmatively check a box or click an “I Agree” button — and “browsewrap” agreements — where the website simply posts the Terms and Conditions and deems usage to constitute acceptance. Clickwrap agreements are generally enforced. Browsewrap agreements are enforced only when the court is satisfied that users had actual or constructive notice of the terms, which typically requires that the link to the Terms and Conditions was prominent, consistently placed, and referenced at the point of transaction.

The leading case on this issue remains Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir. 2002), in which the Second Circuit refused to enforce an arbitration clause in a software license because users were not required to scroll past the agreement before downloading the software. More recent decisions — including Meyer v. Uber Technologies, Inc., 868 F.3d 66 (2d Cir. 2017) — have enforced browsewrap agreements where the interface design made the Terms and Conditions sufficiently conspicuous. The lesson is that interface design is a legal issue, not merely an aesthetic one.

Essential Provisions That Belong in Every Set of Terms and Conditions

While the specific content of Terms and Conditions varies by business type, several provisions belong in virtually every website and SaaS agreement:

• Dispute resolution and arbitration clause — requiring disputes to be resolved through binding arbitration rather than litigation dramatically reduces exposure to class action lawsuits; courts generally enforce well-drafted arbitration clauses under the Federal Arbitration Act, 9 U.S.C. § 1 et seq.
• Class action waiver — paired with an arbitration clause, a class action waiver can prevent the aggregation of small individual claims into a single massive lawsuit; the Supreme Court validated this approach in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011)
• Limitation of liability clause — capping the business’s monetary exposure to users, typically at the amount paid by the user in the prior 12 months
• Disclaimer of warranties — particularly the implied warranty of merchantability and the implied warranty of fitness for a particular purpose under UCC Article 2
• Choice of law and forum selection — designating the governing law and the forum in which disputes must be litigated, which controls where and under what law any dispute will be resolved
• Indemnification provisions — requiring users to indemnify the business for claims arising from user-generated content or misuse of the platform

Terms and Conditions for SaaS Companies: Specific Considerations

SaaS companies face a distinct set of legal exposures that generic Terms and Conditions templates cannot address. Subscription billing models require precise provisions about automatic renewal, cancellation windows, and refund policies — many states have enacted auto-renewal laws that impose specific disclosure requirements. California’s automatic renewal law, Cal. Bus. & Prof. Code §§ 17600–17606, for example, requires that automatic renewal terms be presented clearly and conspicuously before the subscription is initiated and that a straightforward cancellation mechanism be provided.

Data processing agreements (DPAs) are a related but distinct document that SaaS companies providing services to business customers in the European Union or to California consumers must maintain. A DPA specifies how the SaaS company processes customer data as a “data processor” or “service provider” under the GDPR and CCPA respectively. Integrating DPA obligations into the overarching Terms of Service or maintaining them as a separate exhibit is a legal decision that should be made with experienced SaaS counsel.

When Terms and Conditions Need to Be Updated

A Terms and Conditions agreement is not a set-it-and-forget-it document. Several developments trigger the need for a legal review and potential update:

• Launching a new product feature or service that creates new categories of user data or new user interactions
• Expanding into new states or countries where different consumer protection laws apply
• Changes in applicable law — such as new state privacy statutes or amendments to the CAN-SPAM Act
• A data breach or security incident that reveals gaps in your current agreement
• Entering into new commercial relationships — such as B2B enterprise customers or affiliate programs — that require tailored contractual language

When Terms and Conditions are updated, users must be given adequate notice of the changes. Amending agreements without notice can render the changes unenforceable as to existing users. Best practice is to provide conspicuous in-app or email notice of material changes and, for significant amendments, to require re-acceptance before continued use of the platform.

Contact Revision Legal for Terms and Conditions Legal Services

A well-drafted Terms and Conditions agreement is among the most cost-effective legal investments a website owner or SaaS company can make. The cost of drafting proper Terms and Conditions is a fraction of the cost of a single contract dispute or consumer class action. Revision Legal’s internet and SaaS attorneys draft and review Terms and Conditions agreements for businesses of all sizes. Call us at 231-714-0100 or visit our contact page. You can also learn more about our Terms and Conditions legal services.