TERMS OF SERVICE: THEY’RE NOT IMPORTANT, RIGHT?

Terms of service for your commercial web site – they’re not important, right?  Just go ahead and copy someone else’s, change the name at the top, and your business will be fine.  Don’t even read them.  Bury them in a link at the bottom of your page.  Sound familiar?  Obviously, I’m trying to make the opposite point, that terms of service are very important for your web-based business, and here’s why:

T.O.S. ARE A CONTRACT JUST LIKE ANY OTHER CONTRACT

First and foremost, Terms of Service aren’t some funky, web-only creation that everyone ignores and have no effect.  Quite the opposite, they’re a traditional contract between your business and your customers.  Look at the relationships you’ve created with your online service or store, and those are the classes of people with whom you should clearly set out the terms between you.

If you’re a seller of your own goods, you and the purchaser have a legally binding relationship which will be governed by your TOS (especially because you often don’t have a personal relationship with the person, it’s all the more important to clearly set out the terms of the relationship).

If your web business is an intermediary (say, you connect house sitters with home owners looking for house sitters) then your business has *two* classes of consumers for which you should have clear cut contract terms.

This is not to say that your business needs two completely separate terms of service provisions; they can easily be combined into one document.  However, when hiring someone to draft TOS be sure that each discrete class of relationship is treated at some point apart from the others.  For example, warranty disclaimers can apply equally to vendors and customers; on the other hand, you might want to handle refunds or returns differently for the public consumer than you would for a vendor who provides defective goods.

GET EVERYONE TO AGREE TO THE TERMS OF SERVICE

I’ll save you the history lesson, but the “I accept” button you’ve ignored and clicked a thousand times creates a legally binding contract.  That’s why it’s there: to put you on notice that the site is imposing restrictive contract terms on your legal relationship.  So I always recommend to my web owner clients they get at least an “I accept” before allowing a customer to access the commercial aspects of the web site.  Even better, make the scroll all the way through the TOS before being allowed to access the “I accept” button – it’s evidence that you’ve tried to make them actually read the TOS.

INCLUDE STANDARD TERMS IN YOUR T.O.S.

In addition to all of the above, this is yet another reason you should have a lawyer draft your TOS alongside your content: there are standard contract terms that your lawyer will insist be included in the TOS that you might miss if you DIY’d it.  These can include forum selection clauses (you generally want to get sued where you are headquartered, not in Fargo N.D. 1,000 miles from home); arbitration clauses; various forms of warranty limitations and disclaimers; the right to unilaterally change the TOS.  It goes on.

My free advice: take your terms of service for your web-based business as seriously as any contract; more so, in fact, because of the often remote nature of the relationship, you need to be able to solve problems with clients quickly and efficiently.  TOS provide that resource.

For this and all your businesses legal needs, call me in Asheville, Hendersonville, Fletcher, Waynesville, and all of Western North Carolina at (312) 671-6453, email at palermo@palermolaw.com, or for more information palermolaw.com.