Get It in Writing:
The IT Professional's Guide to Essential Contracts

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:

Privacy Policy

Your business can be sued if it's not specific about the way it stores, uses, manages, or discloses personal data. That's why, if you gather information from your customers or clients, you need to have a privacy policy.

For example, if you run an Internet marketing business or you are a database administrator, your privacy policy needs to be bulletproof. Not only do you handle clients' sensitive information, but you have access to their clients' data, too. If you store that information in a way that's not specified in your privacy agreement, your clients (and their clients) can sue you.


Because protocol for handling other people's information should be transparent, most businesses include their privacy policy on their website. That way, clients and customers don't have to guess about how their information will be used.

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.

Looking for an example? Check out Google's in-depth privacy policy. Yours may not need to be as detailed as that of a multi-billion-dollar company, so adapt accordingly. And keep in mind that if you change your policy, you need to notify your customers.


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.

Transaction Conditions

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?"

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