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What Is A Terms Of Service Agreement?

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We’ve all seen them. They are those little messages that pop up before you start using an app, at the bottom of a webpage, or even before our kids start playing videogames. Terms of Service documents are one of the most important legal documents that offer a variety of legal protection against a plethora of potential issues.

Terms of service (also known as terms of use, or terms and conditions) are the legal agreements between a service provider and a person who wants to use that service. The person must agree to abide by the terms of service in order to use the offered service. Terms of service can also be merely a disclaimer, especially regarding the use of websites.

The Terms of Service Agreement is mainly used for legal purposes by companies that provide software or services, such as web browsers, e-commerce, web search engines, social media, and transport services.

It is important to remember that these agreements are legally binding and may be subject to change. Companies can enforce the terms by refusing service, customers can enforce by filing a lawsuit or arbitration case if they can show they were actually harmed by a breach of the terms. There is also a heightened risk of data going astray during corporate changes, including mergers, divestitures, buyouts, downsizing, and similar issues - when data can be transferred improperly.
Terms of service are subject to change and vary from service to service. This being the case, what some companies add to their terms of service to clarify differences in terms include:

  • Availability of previous terms
  • Cancellation or termination of the account and/or service by the user
  • Copyright licensing on user content
  • Data tracking policy and opt-out availability
  • Indemnification or compensation for claims against account or content
  • Notification and feedback prior to changes in Terms
  • Notification of government or third-party requests for personal data
  • Notification prior to information transfer in event of merger or acquisition
  • Pseudonym allowance
  • Readability
  • Saved or temporary first and third-party cookies
  • Transparency of security practices
  • Transparency on government or law enforcement requests for content removal

 
If you are in some of these industries, here are some types of terms and conditions your company may need/have:

General Content

  • Disambiguation/definition of keywords and phrases
  • User rights and responsibilities
    • Proper or expected usage; definition of misuse
    • Accountability for online actions, behavior, and conduct
    • Privacy policy outlining the use of personal data
    • Payment details such as membership or subscription fees, etc.
    • An opt-out policy describing the procedure for account termination, if available
    • Arbitration detailing the dispute resolution process and limited rights to take a claim to court
  • Disclaimer/Limitation of Liability clarifying the site's legal liability for damages incurred by users
  • User notification upon modification of terms, if offered

Data and Marketing

  • Disclaimer clauses (including disclaiming liability for injury caused by their own negligence),
  • Letting the company change terms (including without notice),
  • Allowing data disclosure in specified circumstances,
  • Require consumers to indemnify the company,
  • Promise not to sell data.

Software License Agreements

  • Disclaimer with warranties of merchantability or fitness for purpose or said it was "As is"
  • Disclaimer of consequential, incidental, special, or foreseeable damages
  • Warrant stating the software was free of defects or would work as described in the manual
  • Capped damages at the purchase price or less
  • Warranting whether it infringed others' intellectual property rights
  • Requiring arbitration or a specific court
  • Requiring the customer to pay legal bills of the maker (indemnify), but not vice versa

Cloud Computing

  • Specifying the law to be used (a US state or other country),
  • Specify that consumers can claim against the company only in a particular city in that jurisdiction, though often the company can claim against the consumer anywhere,
  • Requiring claims to be brought within half a year to 2 years,
  • Impose arbitration, all forbid illegal and objectionable conduct by the consumer,
  • Can amend terms just by posting changes on their own website,
  • Disclaim responsibility for confidentiality or backups,
  • Promise to preserve data only briefly after terminating service,
  • Promise to delete data thoroughly when the customer leaves,
  • Monitor the customers' data to enforce their policies on use,
  • Disclaim warranties and almost all disclaim liability,
  • Require the customer to indemnify them, possibly indemnify the customer,
  • A clause stating the company may or may not give credits for poor service

     If you have questions about what goes into a Terms of Service Agreement or need help creating one, feel free to visit our website or call us today!

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