Have you actually ever read a website’s or app’s terms and conditions the whole way through? Heck, I’m willing to bet that you’ve never even read one a quarter of the way through.
Don’t feel left out though, most people never read the terms. In fact, in a study conducted by the University of Connecticut , 98% of people agreed to a terms and conditions that required them to give up their firstborn child.
When creating a website, whether it be a simple blog or a robust ecommerce platform, the last thing you think about is a 4,000-word document that few users will ever read. Instead, you’re focused on the UI/UX design, SEO, pricing, lead generation, and a long list of other components to your online business.
So if the majority of internet users ignore terms and conditions, what’s the point of spending the time to add what seems like a useless page on your website?
First things first…What exactly is a Terms and Conditions Agreement?
Before we go into why your website needs one, let’s quickly review what a terms and conditions agreement actually is.
So, now you’re probably wondering: if people aren’t reading them and they aren’t required by law, then why should I create a terms and conditions agreement?
3 Reasons Why Your Website Needs a Terms & Conditions
Put simply, a terms and conditions is a preventative measure that helps to mitigate the various risks associated with running a website. Your terms establishes a level of transparency between you and the user, which helps to create clear expectations between both parties.
Without these expectations, misunderstandings are more likely to occur and create legal headaches for you and your business. Furthermore, if disputes over the use of your website arise, your terms serve as a reference point that can strengthen your argument in court.
If you’re still not sold that you need one, below are 3 specific ways a terms & conditions agreement can protect your online business:
1. Limits your Legal Liability
A terms and conditions agreement is essentially a legal contract between the website owner and the users. If for some reason you have to go to court over a dispute between you and a user, part of a judge’s assessment of the case will be to evaluate the clauses in your terms and conditions.
You’ll likely need to add a website disclaimer in your terms to limit your liability against:
1. Content on sites that you may link to
2. Content that users post on your site that they do not own
3. Errors or mistakes in your content
4. Damages resulting from accessing or using your site
Here’s an example of what this might look like:
When it comes to legal disputes between you and a user, a terms and conditions agreement can also give you an advantage. In your terms, you can decide how disputes will be settled – whether it be through litigation, arbitration, or informal negotiations. This is a huge benefit that allows you to set the stage where you feel most comfortable.
2. Protects your Intellectual Property
Remember that your website content (articles, logos, images, etc.) is your intellectual property. In order to fully protect your property, your terms and conditions must clearly state that your content is protected by copyright and trademark laws, as well as the acceptable use for your content.
Without doing this in your terms, your position from which to enforce your copyright will be weakened in the event that your content is stolen.
Therefore, make sure you include an intellectual property clause in your terms and conditions. Below is an example of a well-drafted IP clause that you can use as a model for your own:
The clause above states that all content is owned by the website and is protected by copyright and trademark laws. It goes on to mention that the content is for the user’s personal use only and cannot be “copied, reproduced, aggregated, republished…” for any commercial purpose without the consent of the website.
3. Prevents your Website from Becoming the Wild West
For those websites that allow users to interact with one another or users to submit content, a terms and conditions is the difference between a lawless forum of trolls and a well-mannered community.
Whenever you allow users to submit content on your site, whether it be comments or articles, you run the risk of users posting something that:
• they do not own
• they don’t have a license to use
• abuses or is offensive to another user on the site
• violates federal or state laws
• is derogatory or spammy
To prevent users from taking advantage of your site and to give yourself the power to act if they do, you should include a section on ‘prohibited activities’ and a section on the rules for posting content. Here is an example of the common guidelines that websites use regarding contributions:
If users participate in any of the activities above, most websites take action immediately and suspend or terminate the user’s account. However, without a terms & conditions agreement that clearly outlines the prohibited activities that are grounds for termination, a user could potentially sue you. Even Google was sued by a terminated user for not having clear terms and lost the case.
If you’re unsure of where to start or think your terms and conditions is missing one of the sections discussed above, speak with an attorney to make sure your website is covered. Alternatively, there are online terms and conditions generators that can help you craft one on your own.
While creating a document full of legalese that most users won’t read doesn’t seem like the most effective use of time, a terms and conditions is essential to shielding you from the legal risks of running an online business.
Zachary Paruch is a product manager and small business expert at Termly, where he helps to develop legal policy software for small businesses. When he’s not saving SMBs from lawsuits and financial ruin, he can be found playing soccer, binging a Netflix series, or getting a beer with some good friends.