Why You Need A Terms of Service for your Website or App

Any business that operates a website or mobile application should draft a set of terms and conditions (“Terms of Service”) because many times it is the only agreement in place between you and your end-users along with your privacy policy. The Terms of Service are the rules which end users must agree to abide by in order to use your website or mobile application, and below are a few terms that should be included:

  1. Scope of Use. It’s essential to describe how users can and cannot use your product, the scope of use, age restrictions, expected usage, restrictions on use and remedies in the event of misuse. It allows you to set expectations and suspend or terminate users that do not comply.
  2. Proprietary Rights and Licenses. You want to make sure that it is clear that your company owns the intellectual property.
  3. Limitation of Liability. Your Terms of Service will commonly have warranty disclaimers, indemnification clauses but should always include a limitation of liability clause, which is a contractual clause limiting the amount of damages that may be recovered for your acts or omissions. This type of clause notifies end users that you will not be responsible for errors and certain types of damages (i.e., indirect, consequential, punitive). The purpose is to limit your liability according to the level of compensation you receive and otherwise serve as a cap for damages up to a certain amount.

One size does not fit all when it comes to drafting Terms of Service. Websites and mobile applications may operate differently, so contract language that works for one business may leave another business unprotected. If certain key provisions are missing, you could be taking on more risk than you realize. Additionally, failing to specify terms could have an impact on receiving payment and enforcing your rights. Make sure your Terms of Service provides you with the necessary protection for your business.

Tricia Meyer is founder + managing attorney of Meyer Law, a woman-owned, forward-thinking boutique law firm specializing in helping entrepreneurs and technology companies from startups to fortune 500’s with corporate, contracts, employment and intellectual property matters in Technology, Telecom, FinTech, EdTech, AdTech, HealthTech, Internet of Things, Financial Services, Telecom, Social Media, Real Estate, Marketing, Advertising and Healthcare sectors.  As an entrepreneur and a lawyer, Meyer has a unique perspective and is a mentor at tech incubators and accelerators across the United States.  Learn more at www.MeetMeyerLaw.com and follow us on Twitter @Tricia_Meyer or @LoveYourLawFirm.