What is a Terms of Use agreement?
A Terms of Use agreement is a set of regulations that the user agrees and needs to abide by for using a website, product or service. It can also be called as terms of service or a terms and conditions agreement.
Why is it important?
Let’s consider a scenario. You would definitely want to ban users who post offensive content, misuse your service and also prevent/limit anyone from suing you as directly responsible for such actions by your users that violate the law. A Terms of Use agreement will help you do this legally.
Here are a few advantages of having a Terms of Use agreement in place.
Limiting liability:
You can protect yourself legally for inappropriate actions taken by users on your website or through your services. A proper Terms of Use agreement will also help you set the indemnification process and limit your financial liability and security of your business.
Content rights:
Users need to be informed about the ownership of content and copyrights on the website. This will prevent users, competitors or others from copying your original content, logos and designs.
Guidelines:
A Terms of Use agreement details the users on how to use your website/services and what actions are not allowed. It outlines the consequences to the user like potential suspension/ban for inappropriate actions.
Arbitration:
The agreement explains how you would settle a dispute between you and your users or between users. This will have jurisdictional implications as well.
A good Terms of Use agreement should be written in clear language with consumer base in mind. Your users likely aren’t lawyers and writing in language closer to layman’s terms will support their full understanding.
Is a Terms of Use agreement different from Privacy policy?
Yes, a privacy policy informs the user on data collection, storage and usage while terms of use need to be accepted by the user before using the website, product or service. Read more on Privacy Policy here.
Updating Terms of Use:
A Terms of Use agreement needs to be updated annually. Periodic review with a lawyer will help you stay updated on the any changes in law specific to region or industry and ensure there are no gaps.
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