Terms of Service: Why Your Website Needs One

Revision Legal’s Internet lawyers are experts in drafting terms of service agreements for websites, software as a service, and software applications. Our terms of service lawyers have drafted terms of service agreements for companies ranging from small startups to publicly traded companies.

Terms of service agreements are incredibly important because they define the relationship between your website or software and your end users. Terms of service agreements make clear your ownership of your intellectual property and provide your users with limited permission to use that intellectual property for its intended purposes. Terms of service agreements also prohibit specific conduct, such as framing, hacking, data mining, and scraping. Without a terms of service agreement, these activities may be allowed; with a terms of service agreement, the website owner has a cause of action for breach of contract if these actions are undertaken. Terms of service agreements also specify the conditions of subscription and payment. They set the place and location for the resolution of disputes, and they often contain arbitration clauses to keep the costs associated with any dispute low.

Most importantly, however, terms of service agreements provide you with a limitation of liability and indemnification for a breach of the terms of service conditions by the end user. Additionally, they may provide you with certain safe harbor protections, which allow you to escape liability in certain circumstances (see Section 230 of the Communications Decency Act). These clauses provide your website or service with much needed protection from third party lawsuits.

What Should a Terms of Service Agreement Cover?

A well-drafted terms of service agreement is not a boilerplate document — it is a tailored contract that reflects the specific functionality, risk profile, and business model of your website or application. The following provisions are essential for most online platforms:

Acceptance of Terms

The agreement must clearly establish how users accept its terms. Courts have distinguished between “clickwrap” agreements — where a user actively clicks “I Agree” — and “browsewrap” agreements — where terms are buried in a footer link without affirmative acceptance. Clickwrap agreements are far more reliably enforceable. Courts have repeatedly refused to enforce browsewrap terms against users who were never clearly directed to review them. See Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir. 2002). Your acceptance mechanism matters as much as the terms themselves.

Intellectual Property Ownership and Licenses

Your terms of service should explicitly state that all content on your platform — text, images, logos, software code, and design — is owned by you and protected by copyright and trademark law. For platforms that host user-generated content, the agreement must grant the platform a license to use, display, reproduce, and distribute that content in connection with the service. Without this license, users could claim that displaying their posts or photos without payment constitutes copyright infringement.

Prohibited Conduct

Terms of service agreements enumerate conduct that is prohibited on the platform. This section is critical because it creates a contractual basis for terminating user accounts, pursuing breach of contract claims, and excluding liability for harms caused by user misconduct. Common prohibited conduct provisions cover:

• Automated data collection (scraping, crawling, indexing without permission);
• Reverse engineering or decompiling the platform’s software;
• Creating accounts for non-human users or bots;
• Posting defamatory, harassing, or illegal content;
• Circumventing security measures or authentication controls; and
• Framing or mirroring your platform’s content on another website without authorization.

Limitation of Liability

A limitation of liability clause caps the platform’s exposure to damages arising from user claims. Without such a clause, a user who claims economic harm from a platform outage or data error could seek uncapped damages. Most terms of service cap liability at the amount the user paid for the service in the preceding twelve months, or a fixed dollar amount. Courts generally enforce these clauses in commercial agreements between sophisticated parties, though consumer-facing agreements face greater scrutiny in some jurisdictions.

Dispute Resolution: Arbitration and Class Action Waivers

Arbitration clauses divert disputes from the court system into private arbitration, which is typically faster and less expensive than litigation. Class action waivers — which require users to bring claims individually rather than as a class — have been one of the most litigated provisions in consumer terms of service. The Supreme Court upheld class action waivers in arbitration agreements in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), and Epic Systems Corp. v. Lewis, 584 U.S. 497 (2018), making them an important risk management tool for platforms with large user bases.

Privacy Policy Integration

A terms of service agreement should incorporate your privacy policy by reference and clearly disclose what data you collect, how you use it, and with whom you share it. With the expansion of state privacy laws — the California Consumer Privacy Act (CCPA), the Virginia Consumer Data Protection Act, and others — the privacy disclosures embedded in or linked from your terms of service have become legally significant documents in their own right.

Section 230 Safe Harbor

Section 230 of the Communications Decency Act (47 U.S.C. § 230) immunizes platforms from liability for content posted by third-party users. This immunity does not require a terms of service agreement to invoke — it is statutory. However, a well-drafted terms of service can complement Section 230 protection by establishing a clear moderation policy, defining the circumstances under which content is removed, and documenting the platform’s exercise of editorial discretion. Platforms that actively curate content benefit from both the statutory immunity and the contractual protections of a robust terms of service.

Updating Your Terms of Service

Terms of service agreements are not static documents. As your platform evolves, as new laws are enacted, and as courts interpret existing provisions, your agreement needs to be reviewed and updated. The agreement should include a provision stating that you reserve the right to modify the terms and specifying how users will be notified of changes. Notice mechanisms that courts have found adequate include posting a notice on the website, sending an email to registered users, and requiring affirmative re-acceptance after material changes. Agreements that purport to bind users to future modifications without adequate notice are frequently challenged as unenforceable.

Contact Revision Legal’s Terms of Service Attorneys

If you need a terms of service lawyer, contact the terms of service lawyers at Revision Legal at 855-473-8474 or complete the contact form on this page. We draft, review, and update terms of service agreements for websites, mobile applications, SaaS platforms, and e-commerce businesses. Our agreements are drafted to withstand legal scrutiny — not to check a box.