Photo Credit: Steve Snodgrass

As a website owner, you likely know—perhaps by experience—that anonymity on the Internet often leads to otherwise unacceptable behavior. But, what you may not know is that a Terms of Service agreement may give you legal recourse in stopping that behavior and laying out your expectations to your website users.

What is a Terms of Services Agreement?

A terms of service agreement, also known as a Terms of Conditions agreement or a Terms of Use agreement, is a legally binding set of regulations that website users must follow in order to use your service. The agreement sets forth guidelines for acceptable behavior while using your website or app, but can also serve as a disclaimer regarding your use of website user’s data.

What is the difference between a Terms of Services Agreement and a Privacy Policy?

Like a privacy policy, a Terms of Service agreement alerts users to how you will use their data. Understanding the difference between the two, however, can be useful in understanding your legal responsibilities. A privacy policy merely informs users about how their data will be used and stored, whereas a terms of service agreement requires website or app visitors to sign the agreement as a condition to using your services.

Your terms of services agreement should include terms that will prevent claims against you from website visitors in the future. Your privacy policy, on the other hand, should include general legal terms relevant to your industry.

Finally, only privacy policies are required by law if you collect personal data. While a Terms of Service agreement is not required, it is always a good idea.

Why do I need a Terms of Service Agreement?

The Terms of Service agreement is a legally binding contract between you and your website visitor, and it sets forth guidelines that users must follow in order to use your website. For example, your Terms of Services agreement can include a clause prohibiting spamming other users. If you also include a termination clause, users are now on notice that you can terminate their account for spamming other users—among other reasons stipulated in the agreement.

Another benefit of a Terms of Service agreement is that you can inform users you own the website content and that it is protected by copyright laws.

Perhaps the most important benefit, however, is that a Terms of Service agreement allows you to limit liability by including a Warranty Disclaimer. This clause provides that the website owner cannot be held responsible for errors in the website’s content.

For more information on what your Terms of Services Agreement should include, contact Revision Legal’s trademark attorneys through the form on this page or call 855-473-8474.

Enforceability: Clickwrap vs. Browsewrap Agreements

Not all Terms of Service agreements are equally enforceable. Courts distinguish between clickwrap agreements — where users must affirmatively check a box or click “I Agree” before accessing the service — and browsewrap agreements — where the terms are posted on the website but users are not required to take any affirmative action to signal assent. Clickwrap agreements are routinely enforced because affirmative assent is clear. Browsewrap agreements face much greater scrutiny, and courts often refuse to enforce them unless the website prominently displayed the terms and the circumstances reasonably put the user on notice.

In Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir. 2002), the Second Circuit refused to enforce an arbitration clause buried in a browsewrap agreement because plaintiffs had no reasonable notice of the terms before downloading software. For businesses seeking maximum enforceability, a clickwrap mechanism with logged timestamps of when each user clicked “agree” is the gold standard.

Key Provisions Every Terms of Service Agreement Should Include

• Acceptable Use Policy: Clearly define what users may and may not do on the platform. Prohibited conduct should include harassment, impersonation, posting illegal content, reverse engineering, scraping, and activity that interferes with the platform’s operation. A well-drafted acceptable use policy is your primary basis for suspending or terminating user accounts without liability.
• Intellectual Property Ownership and License: Specify who owns user-generated content and what license the platform receives. If your business model depends on using, displaying, or distributing user content, you need an express license grant from users or you risk copyright infringement claims.
• Disclaimer of Warranties: An “AS IS” disclaimer disclaims implied warranties of merchantability and fitness for a particular purpose. Without this clause, your platform may face warranty claims from users who relied on inaccurate information presented on the site.
• Limitation of Liability: Cap your aggregate liability to users at the fees paid in the prior twelve months or at a fixed dollar amount. Courts enforce these provisions when they are mutually applicable and not unconscionably one-sided.
• Indemnification: Require users to indemnify and hold harmless the platform against third-party claims arising from their use of the service, including claims of infringement, defamation, or violation of applicable law.
• Arbitration and Class Action Waiver: Mandatory arbitration clauses combined with class action waivers substantially reduce litigation exposure. The Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), confirmed that the Federal Arbitration Act preempts state laws that would otherwise invalidate such waivers in consumer contracts.
• Governing Law and Forum Selection: Choose a favorable state for governing law and specify the jurisdiction where disputes will be litigated or arbitrated. This prevents users from dragging you into their home jurisdiction for disputes.

Modification and Notice Requirements

Most businesses need to modify their Terms of Service as the platform evolves. A well-drafted agreement should include a unilateral modification clause that permits the company to update terms with advance notice to users — typically 30 days via email or a prominent website banner. Courts have enforced these modification clauses when users were given notice and a meaningful opportunity to stop using the service before the new terms took effect. Without such a clause, modifying the terms requires fresh assent from every existing user — an operationally impossible requirement for any platform with a large user base.

Terms of Service as a Business Control Tool

Beyond liability management, your Terms of Service is the primary instrument for controlling user behavior on your platform. Operators of marketplaces, social networks, SaaS platforms, and e-commerce sites have used well-drafted terms to enforce content standards; prevent competitors from scraping their databases under both the terms and the Computer Fraud and Abuse Act, 18 U.S.C. Section 1030; establish account ownership rules that prevent departing employees from taking customer data; and restrict resale of digital licenses or access credentials.

Contact Revision Legal’s Internet Attorneys

A Terms of Service agreement is not a set-it-and-forget-it document. As your platform grows, as regulations change, and as courts interpret online contract law, your agreement should be reviewed and updated regularly. Revision Legal’s internet attorneys draft, review, and enforce Terms of Service agreements for businesses of all sizes. Contact us today to make sure your terms actually protect your business.