Chapter 3: Other Contracts: Terms and Conditions Edition
Running a business in the digital age means you probably have a website, app, or some way to distribute information online. And if you do anything other than offer information, you'll likely need a terms of service agreement for those who use your services.
Terms of Service Agreements
These are rules that users agree to in order to use a service. For websites, this may merely be a disclaimer. For mobile apps, you may have users agree to these terms before they can download the program to their device.
Depending on what you do, your terms of service agreement may include the following components:
Typically, privacy policies describe…
- What personal information is collected.
- How the information will be used, stored, or managed by the company.
- How the information will be transferred to third-party companies.
- How cookies will be used.
- How users can modify or delete their personal information.
- How users can opt out of future communications.
- What processing server will be used when collecting sensitive financial information.
If your website links to other sites, offers ad space, or has a blog that allows users to comment, you should probably have a disclaimer in your terms of service agreement. This should explain that your IT business doesn't endorse and isn't responsible for the accuracy or reliability of third-party content. As for ads, you must state when you are getting paid to provide endorsements.
Also include a disclaimer about the information your site offers. For example, you could state that the site and its components are for informational purposes only, and that your site isn't liable for the accuracy or usefulness of any information made available on it. That way, if someone sues you because they followed your blog's security tips and they still suffered a data breach, your disclaimer may help you in court.
Though a disclaimer may minimize the financial impact if you are sued, it won't deter lawsuits altogether. That's why you should always carry adequate liability insurance just in case.
If you sell software as a service (SaaS), your terms of service agreement should include notices regarding credit card use, third-party payment processing, and refunds. These notices are called "transaction conditions."
Intellectual Property / Copyright Notices
Include notices regarding copyright and trademark of the site's components.
Now that you know the touchstones of a Terms of Service agreement, let's move on to another important issue: what a breach of contract is and how it can lead to lawsuits.
Next: Chapter 4: What Is a "Breach of Contract?"