The Importance of Terms of Service

Our attorney, Chris Gatewood of Threshold Counsel, sent out an email recently about the importance of a bulletproof Terms of Service document for your website, especially those sites with a transactional or eCommerce component. We wanted to share his advice with our readers, with his permission, of course!

From Chris:

[Terms of Service] is a quick legal to-do item for your sites and apps, to the extent that you are involved in this conversation at the design phase of your projects. These are two easy fixes which can save you and your clients big legal problems over time.

Zappos lost a big court case last month, in which the judge refused to enforce its site Terms of Service because they were simply present in the background and did not require any confirmation by the site users that they were bound by them. [Note: more info on that case here.]

So that this doesn’t happen to you or your clients, please add a click box in both your account signup page and in your shopping cart, saying “I agree to the site Terms of Service” and having a link to the Terms, so that users will have to tick the box to proceed to create their account/profile or to buy something.

And if you have anywhere that says that you reserve the right to amend the terms at any time, please delete that. You can always amend and update the terms, and your current terms will bind those people who use the site under that current set of terms.  But I was looking into it, and several judges have found that stating that you can unilaterally amend makes them think that the Terms of Service is too one-sided to be enforceable.

So what to do? It’s tempting to pull boilerplate text from the internet, but like any contract, your Terms of Services is an important legal document that should be customized to protect your business and website.

We urge you to discuss your Terms of Service with your attorney. (Don’t have a dedicated attorney? Call Chris!) And, if you need help implementing Chris’s suggestions, just give us a call.