Website Terms of Use & Click-Wrap Agreements for Effective Business Strategy

Almost every web page has a “click-wrap agreement” style of disclaimer, terms of use (TOU), or terms and conditions of service. This is true even for sites that are not business or e-commerce websites. Software, application, and website terms of service are so ubiquitous and boring that most users don’t read online click-wrap agreements – they simply accept the service terms and conditions of use without knowing the terms they have accepted.

But users aren’t the only folks that take terms of service (TOS) agreements for granted – startup developers of software, video games, applications, websites, and business owners are also guilty of taking shortcuts. Frequently, click-wrap agreements are just copy-pasted from another website, instead of getting an experienced intellectual property lawyer and contract attorney to draft a proper legal agreement. This is a short sighted mistake that can have an impact on the long-term success of the business.

A well-drafted click-wrap agreement isn’t just a method of protecting you from liability and complying with various state and federal laws, it’s also an important tool to build valuable intellectual property rights and prepare for the flexibility and exit strategy you may want to deploy as you alter or change the course of your service, product, or business strategy.

Are Website Terms of Service Enforceable?

It depends. Enforcing website terms of service is generally a matter of contract law. Early “shrink-wrap agreement” lawsuits in the hardware and software industry set the early parameters for drafting an enforceable click-wrap agreement or “click-through agreement.” While the details surrounding any specific terms of use (TOU) agreement are always important, there are several general points to keep in mind:

1. The user should be required to select a “check box” to agree to the terms of the TOU or disclaimer;

2. The TOU or disclaimer that is referenced in the check box confirmation should be hyperlinked to the actual TOU or disclaimer.

3. It’s best practice to include a check box confirmation for any user submission, whether the user is uploading content to the site, submitting communication to the webmaster or business, or simply subscribing an email address to a newsletter.

4. It’s best practice to include a hyperlink to the TOU or disclaimer on every page throughout your website.

Business Strategy and Click-Wrap Agreements

Software, application, video game, and website terms of service (TOS) can be one of the strongest components of your business strategy. It is a contract between you and your users. With well-drafted terms and conditions of service, you can acquire licenses to use information and user-generated content, and to re-license or sell such data.

Additionally, most businesses will change certain policies, terms of use, or business strategies over time, and it’s important to ensure that your TOS commits the user to accept future changes that you make to the TOS when your product, service, or business strategy changes. Additional processes and mechanisms may be appropriate to maximize the effectiveness of these terms, and an experienced IT lawyer can advise you in the best approach for your business strategy.

Danger of Copy-Paste Terms of Service (TOS)

Many developers and business owners simply copy disclaimers, privacy policies, and terms of use from other websites – a dangerous practice. It’s almost always the case that these “borrowed” TOS agreements give you a false sense of security, while exposing your business to additional liabilities and diminishing your ability to maximize the growth, value, and security of your assets.

If your business interacts with customers in the digital world and you want to build value and security into your business strategy, don’t shortcut your terms of service. Get advice from an experienced intellectual property attorney to align your business goals with diligent business law strategy.

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Tags: Business Strategy, Intellectual Property, MT, Software Development, Terms of Use TOS, Texas Intellectual Property Lawyer, Web Development

This entry was posted on Tuesday, March 5th, 2013 at 9:15 am and is filed under Intellectual Property. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.