Essential Considerations When Drafting Your Website’s Terms of Use Policy

Essential Considerations When Drafting Your Website’s Terms of Use Policy

By David A. Wheeler, Greenberg Traurig

One of the questions that I often hear from online business owners is "why can't I just copy someone else's terms of use off their website and use it on mine?"

My answer is, why would you want to invite someone else's liability into your own front yard?  It's just not a good practice.  It's not something I would ever advise doing. 

What you really want to do though is go back and analyze the type of business that you are.  And it's a broad spectrum.  Are you an online business that simply provides information? Are you a passive site that doesn't collect information and you simply provide a service with regard to the information? Or are you a fully interactive site where products and services are actually being bought and sold over your site?  Over the length of that spectrum are going to be specific needs that should be detailed in your website's terms of use. 

There has been a trend on certain websites to make the terms of use more folksy and fun and less "legalese".  I wouldn't advise doing this, because your terms of use form a contract.  They represent an agreement between you and your users that you want stated in contractual terms.  It's nice to be reader-friendly and user-friendly, but in terms of being specific and clear from a legal perspective as to what that agreement is, you cannot avoid some of the legal language.      

Trademarks, Logos and Content

Make sure that your users understand that the trademarks and logos-either licensed from third parties or your own-belong to you and that users do not have a license to use them for their own purposes. 

The same thing goes for website content and copyright. Make sure that all of your users know that any content that is on your website is copyrighted.  Because you own it, users need permission to use it.  Your competitors need to know that they are not entitled to copy and use content from your website because of this copyright.

Another very important clause in your terms of use should address what you do with user-submitted content and what your obligations are with respect to that content.  If you have the kind of site that allows users to submit content, you need to tell users that they are giving you the rights to that content and that you can do what you want with it.  Also, you need to make clear that you don't have to pay for user-submitted content and that it is not confidential.  Your terms of use should stipulate that you can share user-submitted content with third parties and that the user is granting you a license to use the content worldwide for whatever purpose you want to use it for.

Third-Party Content

Probably the next most important clause that should go on a website terms of use is language that states that you're not endorsing or responsible for third-party content.  If someone does submit that content, make sure that you shield yourself from any liability that might exist in case they have infringed on someone else's intellectual property rights. 

If your site has links to third-party advertisers or product providers, be sure to disclaim any liability concerned with the products and services bought from those sites through those links. 

It's also important to spell out what the prohibited or acceptable uses are for your website.  These are pretty standard clauses, but you want to make sure that you put folks on notice that they cannot use your website for any illegal purposes.   Feel free to list those purposes in specific terms.

Due to data breach concerns, it is important that you maintain control over who has access to personal information on your site.   It's important, however, that users be put on notice that they are responsible for anything that happens under their password and are obligated to report lost or stolen passwords.  Even if it's a simple password for a user to get on your site, there's probably some clever hacker out there who can find a way to manipulate it and gain access beyond the point where you want users to go.

Limitations Of Liability

When creating a terms of use policy, be sure sure that it has limitations on the liability and the appropriate carve-outs for jurisdictions that restrict those limitations with regard to warranty exclusions.  You should include a very broad indemnification clause that holds users responsible for violations of your terms of use policy.

In some cases, you might even want to get a release of liability from all your users.  That way you're not responsible for any liability or damages users may experience as a result of using the website.  Finally, consider inserting a choice of law provision, which stipulates where certain issues can be argued. 

David A. Wheeler is Of Counsel at Greenberg Traurig, where he focuses his practice on eCommerce, information technology, and privacy matters. His experience includes domain name and trademark disputes and registrations, trade secrets litigation, information privacy and identity management, data breach notification compliance, software licensing and outsourcing agreements. Prior to practicing law, David served as a software engineer for a Virginia-based defense contractor and later traded spot currencies as an electronic market maker for the First National Bank of Chicago. He also served as telecommunications consultant for the Bank of America. David has also litigated consumer financial services matters including Telephone Consumer Protection Act and Fair Credit Reporting Act class-action matters.

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