“Click here to agree to our terms of use.”
Does this sound familiar? When signing up on a website or using a product, this dialogue pops up with a lengthy document, which many scroll past without reading. That document is called “Terms of Use.” It is usually written alongside the privacy policy, but we will discuss privacy policies later. The real question is, what are terms of use and why are they important? Or better still, why should you, as a founder, have one?
What is a term of use?
Terms of Use are the rules, specifications, and requirements for using a product or service. They serve as a contract between the product or service provider and the user. The phrase is sometimes used interchangeably with “Terms of Service” or “Terms and Conditions.”
Terms of Use are essential. A well-drafted terms and conditions agreement is essential to your business’s long-term success and security as it states the rules you and your users must obey. It is a contract between your business and its users so each party can understand their rights concerning your product or service.
Not having these rules and conditions leaves your business vulnerable to abusive users, intellectual property theft and unnecessary litigation. For instance, rules on what constitutes appropriate activity on your website or application give you the right to remove or even ban users who violate the terms. Twitter did this when they banned Trump in 2020 following the violence he incited at the country’s capitol building.
Reasons why you should have a Term of Use?
Having terms of use is not legally required by law. However, it is considered standard practice, and not having one could put your business at serious risk. Thus, a simple website Terms of Use page will provide that extra layer of legal protection if you plan to grow your business or expand your user base. Below are a few reasons why you should have one:
- Limit liabilities
The last thing you want is a user suing you because of a typographical error, website downtime, or even glitches. The terms of Use may provide for a warranty or limitations of liability disclaimer. You could restrict liability for lack of enjoyment, inaccuracies, viruses, product/website downtime, and glitches.
- To State Policies and Avoid Abusive Behaviour
Imagine you have a social media platform, and a user is harassing other users on the platform. Still, he has paid to use the platform, so how do you ban or remove such a user so the user cannot sue?
Your Terms of Use is a great avenue to list when and why you can terminate the accounts of abusive users.
You may even state the behaviour classified as ‘abusive’. For instance, most companies will ban users using the platform or website for illegal activities, bullying other users and unauthorized web scraping.
- To help prevent others from stealing or copying your content
You should consider getting a Terms of Use to disclose and protect your intellectual property rights. Adding this disclosure clause to your Terms of Use informs your users of your intellectual property rights, like your content and logos. If you find others copying your content, you can take legal action against them since your Terms of Use agreement which they agreed to, is legally binding.