Visit any website and you will find a Terms of Use (ToU) or similarly named page. Essentially, the ToU is an agreement dictating the rules of the relationship between the business (website owner) and the visitor.
It’s an important page. Yet so many businesses pay little attention to its creation. Some ToUs are “borrowed” from other sites. Some are hobbled together with terms copied from multiple sources. Some are “customized” generic forms generated by answering a handful of questions. Then there are those customized ToU written by people showing off how many commas they can use or how convoluted they can make a paragraph.
Because your ToU binds both you (the company) and the website user to a set of rules, it is imperative that the terms written accurately reflect the company’s desired rules of engagement, are understandable (it’s difficult to comply with terms you can’t understand), and enforceable. Before posting any ToU, carefully read through it. Does it avoid the 3 deadly sins? Does it follow the 4 commandments?
Of course you can. The better question is should you write your own. The short answer is maybe. The better answer is probably not.
In today’s internet reality, the ToU is more than the single page titled “Terms of Use”. Instead, it is a collection of documents (pages) detailing the relationship between the website and the visitor. There is a page setting out the privacy policy. Another for the cookie policy. Then, depending on the type of business, there are policies for shipping, returns, purchases, and other interactions that may take place between the parties. All of those (applicable) policies should be part of the “Terms” the parties agree to.
Can you write all those policies yourself? Again, you can but probably shouldn’t.
Some policy terms are governed by laws or regulations (which may vary from jurisdiction to jurisdiction or industry to industry). An omission or oversight may result in a term that is either drastically different or unenforceable. As an aside, payment processing requirements are not the law but they should be treated as such when it comes to your policies. Failing to take heed of these requirements may result in legal action against you or the loss of your ability to process payments. Can your business afford to lose the ability to process payments?
Poorly written terms can be costly — extremely costly. In addition to unnecessary legal expenses, poorly written terms can increase operating costs, alienate customers, and tarnish your brand’s image or reputation.
1. Missing or Incorrect Terms: Both parties are bound to the terms written — assuming those terms are enforceable. With careful reading, missing or inapplicable terms are relatively easy to spot and remedy. Of course, that assumes the writer (or proofreader) knows what terms need to be included and which are inapplicable. Missing words or terms can, and most often will, change the intended duties of the parties.
Suppose you want to require a written notice of a dispute be sent to you at least 30 days prior to the initiation of formal proceedings. But instead of saying “the disputant must provide the company with an opportunity to resolve by sending a written notice at least 30 days prior to initiating formal proceedings” the published ToU says “a disputant may send a written notice of a dispute.” This creates a big difference between the intended term and the agreed term (the published ToU). As written, the example makes the written notice optional by using the word ‘may’. If the ‘may’ in our example is replaced with ‘must’, we still do not achieve the desired effect because a timeframe for sending the notice is missing. Meaning, the notice could be sent days, hours, or minutes before beginning formal proceedings. Thus, the published term (in this example) fails because it has a missing term and uses the wrong word.
Remember, the terms as written are what the parties agree to!
2. Nonbinding Terms: As shown in the example above, not all terms have the intended effect. Sometimes wording is the problem but there are other reasons a term may not be binding. There may be legal requirements regarding the wording or presentation of a term that is not met (e.g., mandatory arbitration clauses). Or there may be an unmet condition precedent that prevents the term from being binding.
Unclear, confusing, or contradictory terms are, perhaps, the most troubling. Most can be spotted (or prevented) by an objective professional with knowledge of legal interpretations. However, these troublemakers are often overlooked by website owners (who know what was meant) and skilled writers inexperienced with the legal ramifications of website policies including the Terms of Use.
3. Unenforceable Terms: There are several reasons why a term or even the entire ToU may not be enforceable. ToUs are contracts and are governed by the same principles.
1. Enforceability: Duh! An unenforceable agreement or term has no value.
2. Readable & Understandable: Simply, a person agrees to the terms as they understand them. If terms are convoluted, vague, or rely on uncommon meanings, the user may agree to a different understanding of the terms. This results in battling over the meaning which can be expensive. (Yes, it could end up in court.) Keep it simple. Define what needs to be defined. A term can have multiple sentences, it’s ok. There is no minimum requirement for the number of commas and less is better.
3. Completeness (comprehensive): Do not assume anything is implied, customary, or generally understood. The user will be bound by what is referred to as the “four corners” of the agreement. For example, if you want your privacy policy to be part of your ToU then state that the privacy policy is part of the agreement. Whatever it is, make sure you include or incorporate it.
4. “Fair”: ToUs are often biased against users. Afterall, they are written to protect the business engaging with the user. This is, generally, acceptable. But if the unfairness is too much, the agreement (or offending term) becomes unenforceable as written. Then it is up to the court to decide if the term (or agreement) is unenforceable or needs to be rewritten. Excessive unfairness may also damage the reputation of your business. Users may not always complain to the courts, but they will almost always complain to other people.
Writing a ToU deserves more attention than it gets. It, along with the other policies published on your website, create a legally binding agreement between the website and the user.