Legal Considerations When Drafting Online Terms of Service

When you access a website, how many times have you read the terms of service (TOS)? If you’re like most people, the answer to that question is rarely, if ever. But that doesn’t mean that a good TOS page for your own site isn’t important.

Enforceable Contracts?

A TOS is, at its core, a contract between you and the user, and whatever an end user agrees to in a TOS is enforceable in court.

But that doesn’t mean it is automatically enforceable. There are things that need to be done and ways that a TOS needs to be drafted to ensure that they are enforceable.

One of the biggest and most obvious requirements is that the end user must consent to the TOS. This can be with a check box, or a button on the site, but just posting your TOS, or hiding them on a separate page on your site, won’t automatically make your TOS binding.

In some cases, and based on the laws of different states, some parts of a TOS, such as waiver of jury trial, or submission to arbitration, may need a separate, specific consent from the end user.

Adhesion Contracts

Because TOS are not negotiable, they technically are adhesion contracts—contracts where one party has far more bargaining power, and where the terms of the contract are “take it or leave it.” That doesn’t automatically make them unenforceable. But it does mean that you need to be careful about making your TOS too one sided, as a court could find them unconscionable.

Multiple States

Another big issue with a TOS is that online, you are subject to the laws of every state. That means that you may need to make sure that what is enforceable in one state works in others. In many states, things like jury waivers, class action waivers, or hold harmless provisions, may need to be set apart from text, or highlighted.

A severability clause, saying that if a portion of the TOS is invalid in a state, the remainder of the TOS remains enforceable, can be helpful.

Choice of Law

Because of the different states (and possibly, countries) that people will use on your site, your TOS absolutely must have a choice of law and a choice of venue. This way, if there is litigation, you can ensure that it is filed in a location and court which is best for you (and the business law attorneys you choose to work with).

Protection for Hosted Comments

If others will be able to post to your site, such as comments or reviews on products, you will want to have a Digital Millennium Copyright Act disclaimer so that you get the benefits of immunity that are provided under the law for online content providers.

You also will want a policy that deals with intellectual property, and your right to take down information posted by third parties that infringe on others’ intellectual property rights.

Questions about your website or the legal language that is necessary to protect you? Call the West Palm Beach business litigation lawyers at Pike & Lustig today.

Sources:

business.com/articles/legal-challenges-for-ecommerce-businesses/

mailchimp.com/resources/website-terms-of-use/