By Jeffrey A. Cohen, Esq.
We receive inquiries quite often from prospective clients wanting form documents to use as Terms of Service to govern the use of their website or inquiring as to whether a set of Terms drafted for one operator site, or worse, simply found on an unrelated website, can be used instead of having terms drafted for the particular site involved. For purposes of this article, Terms of Service include Terms of Service, Terms and Conditions, Privacy Policy, Acceptable Use Policies, Subpoena Policies, UDRP policies, Child User Policy, Copyright Claim Policies, and any other policy or procedure that you have in place for users of your website or the operation of your online business.
While there is no law that requires a website operator to post Terms of Service (other than a Privacy Policy in some instances) your Terms give you the opportunity to set forth the conditions under which you allow the users of your website to purchase your products or services, post content or use and depend upon the information and materials that you provide them. Your Terms are your opportunity to set the expectations of your users in order to avoid, as much as possible, any disagreement about your user’s rights to use your site, your user’s right to depend upon the availability of your site, your user’s need to pay for your site, your user’s right to post content to your site, your right to remove content, and the terms under which you offer any product or service for purchase from your site and the your applicable limitations among many other things.
A website without such terms leaves the agreement between the operator and the user to be gleaned from the nature of the site or kind of transaction which may ultimately be determined to be significantly different than intended by the operator.
In general, posting such terms alone is insufficient. In many instances, securing some evidence of agreement by the user or customer to the Terms is required to successfully enforce them. This is often accomplished by a simple check box next to a statement of agreement to the terms.
Another general rule is that the closer the user is to the actual text of the Terms the greater the likelihood of enforceability. For example, if your user checks a box saying they agree to your Terms of Service but you do not provide a conspicuous, direct link to those terms, any enforcement of the best Terms could be difficult. Where agreement to certain terms is crucial to operations some require not only a link to the terms but they require the user to scroll to the end of the terms before allowing them to indicate their agreement. Other operators require a user to type their “signature” to evidence their agreement to the terms. A signature in that instance can usually be any electronic representation the user intends to bind them to the agreement but typically takes the form of the users name surrounded by slash marks (eg: /User First and Last Name/) This makes it that much more unlikely that a user could argue that they did not understand that they are agreeing to Terms or to exactly which Terms they are agreeing.
For InternetLitigators attorneys, the process of drafting terms of service for any website involves three stages.
1. Interview Preferably in person but often by telephone we spend the time to get to know the personality of the operator and their attitude toward customers, users, privacy, returns, payment, and other issues relevant to the site.
2. Investigation By this we mean a thorough investigation and examination of the bsite including any information collected from users or customers, eCommerce, user content, third party content, graphical content, video content, musical content and all services provided. If there is a membership process we actually register for the site and work through the entire membership script from beginning to end.
3. Drafting The information obtained in the first two stages is brought together into one (or more) documents that reflect the specific business of the website, the philosophy of the operator, and the specifics of the day to day operations of the website and business.
There is a fourth stage, annual review, where the website policies are updated to reflect changes in policies or procedures as well as any applicable changes in the law.Any process that fails to include each of these stages risks inappropriate, incomplete, inaccurate or outdated terms of service and consequences including customer complaints, returns and chargebacks, copyright infringement claims, and even lawsuits and customer complaints, to lawsuits by customers or users and even third party liability.
Some online services offer form agreements for sale and market them as being for use on websites however in our experience each such services are without fail careful to point out that they are not offering legal advice and cannot guarantee the applicability of any form agreement to any particular situation causing one to wonder exactly what value such an agreement provides.
InternetLitigators has written a great many sets of Terms for clients. About half of our assignments in this regard are from clients that already have Terms posted which are either written by the client or adopted from a collection of sources. The other half is from clients that have no posted Terms at all. Either option is perfectly acceptable.
Generally, a set of Terms for a website will take the same amount of time to draft from scratch as it will to prepare from a document created by the client. This is because re-writing is, in general, a slower process. Often, fixing problematic or internally inconstant, inapplicable or ineffective language is more time consuming that simply drafting an agreement from the beginning.
In some instances, the setting and posting of certain terms are required by law. California, for example, requires any website collecting personally identifiable information from California residents to post a privacy policy containing at least the following information:
• An identification of the categories of personally identifiable information that the operator collects from consumers.
• An identification of the categories of third-party persons or entities with which the operator may share that personally identifiable information.
• A description of any process in place for consumers to review and make changes to the information collected.
• A description of the process by which the operator will notify users of any material changes to the policy.
• Identify the effective date of the policy. Conclusion The effect of any policy that you post can have significant consequences. The failure to post a policy can create significant ambiguities with Users and Customers and in some instances can be a violation of law. The thought of buying an “off the shelf” policy or simply posting a policy without some legal review by and Internet Attorney is cause for concern and appears, based upon our experience, to be a strategy that is now seldom adopted for serious business websites.
Mr. Cohen is a Partner in the Law offices of Cohen & Richardson LLP in El Segundo, California. He chairs the firm’s Internet & Technology Practice Group and represents Internet companies Worldwide on all business law issues. He is also the director of InternetLitigators. This Blog neither constitutes legal advice nor creates an attorney client privilege with the reader. Do not post comments concerning specific legal situations. Mr. Cohen can be reached at jcohen [@] InternetLitigators.com.