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Why You Actually Need Terms of Use for Your Website and How to Create One

Feb 22, 2023 · 5 min read

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Most users couldn’t care less about the Terms of Use agreement that pops up whenever you need to access a website. But from the standpoint of a domain owner, including this agreement is probably the most essential precaution to be taken before any interaction with users can happen. Why? Stick around and find out by the end of this guide.

Is it the same as “Terms and Conditions”?

Yes, they are the same thing, some just call it Terms. In essence, it’s a legally binding agreement between your website or app and its users, that defines the rules of their interaction. It’s not legally required to include such an agreement, nor is it impossible to change the rules along the way, but having them established and dealt with in the first place can benefit you and your business greatly.

Why do I need to have Terms of Use?

An agreement like this serves mostly as protection, getting all the necessary disclaimers out of the way and informing users of any rules to follow if they wish to use your product. The main reasons to have a Terms of Use agreement could be:

Liability Mitigation

By having a user agree to the rules you’ve set, you can limit your own liability in case things go south. And they can: imagine if someone makes a misinformed decision based on your content that leads them to sustaining some serious damages. Can they sue you for that? Not if they agreed to a clause that clears you from any such claims.

Things get even more complicated if your website allows user-to-user interaction or any type of user-generated content. You don’t want to take legal responsibility for whatever people say or upload to your platform, which is why the least you can do is set some rules about it: what is allowed, and especially what isn’t. If it’s worth mentioning that users are third parties, whose opinions do not represent yours, mention it. But keep in mind that while a Terms of Use agreement can limit your liability, it doesn’t clear you of it completely: you are still responsible for content monitoring and moderation.

Misconduct Prevention

Yes, it would probably be more efficient to take the measures to prevent user misconduct than to avoid having to take responsibility for it. You can include a clause describing the types of malicious or abusive user behavior that would terminate their access to your website. The banhammer could also be explicitly hung over any potential malware or spam bots users may, or rather may not employ.

Copyright Protection

An Intellectual Property clause about the permitted use of content on your website would be a great addition to the Terms and Conditions, if you intend to make your money off of it. Such content may be whatever digital media or data that is meant to be exclusively represented on your website.

Choice of Law

If you conduct a business through your website, you’d be well advised to declare in the Terms of Use agreement under which country or state laws it operates in. This may be especially important should any legal dispute arise concerning transactions that involve users from other countries. If that is the case, a court will surely consider your preference of the governing law to be applied to your website activity.

Where to put the Terms of Use agreement?

It doesn’t necessarily matter where it is on the screen as long as it’s easily accessible. Agreements that don’t demand any action from the user other than their use of the website (browsewrap agreements) can often be found on a separate webpage linked on the main one. Clickwrap agreements are actively placed in front of the user prior to any important action being taken by them.

Making the choice between the two types is dependent on how active you need the agreement to be and whether you want to be able to rely on it in court. In some cases it would be wiser to use the latter.
Here’s a bunch of ideas for places on your website you could put your Terms:

  • Website footer
  • Login or account creation page
  • Checkout page
  • Content submission page
  • Pop-up box
  • Inside Privacy Policy

Where do I even start?

Some time ago, you would be highly encouraged to use a legal adviser to make the agreement for your website as thorough and effective as possible. It’s not so much the case these days with an array of customizable generators found across the web, especially if your business is relatively small. Enty, for one, offers an easy Contract Management tool where you can create your own valid Terms of Use agreement in a matter of minutes.

Just answer simple questions and your document will be ready. After that, you can just download the document or copy a link to it and add it to your website.

Now, you’re good to go. Just remember to review and update your Terms of Use every few months according to any changes happening in the governing law or the industry you operate in. And if nothing’s changed, maybe you’ll stumble across a few gaps you’ve missed before — it wouldn’t hurt to fill them either. Well, maybe a little.
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