Why Your Website Needs a Terms of Use Agreement

by Shaya Silber

Obtaining our goods, services, entertainment and information, is no longer confined to brick and mortar, plastic and steel. We are becoming accustomed to receiving things via our computers; our gateway to essentially everything. This shift presents new opportunities and obstacles to contend with. Many of these challenges are not even fully comprehensible yet. Among these new challenges is effective contract formation and protecting yourself (and your website) from potential liability.

Most websites nowadays have Terms of Use agreements that bind visitors when they visit a site. Terms of Use are important both for a site’s visitor as well as its operator. It’s important for the visitor because the Terms let them know what they can and cannot do, and what they can expect. It essentially outlines the relationship of the parties. The Terms are important for the site’s operator, because just as any physical person or business can incur liability, a website can, too.

Terms of Use Agreements Should be Customized To Your Site

There is no standard Terms of Use that is applicable to all websites. The Terms depend on a number of factors including the nature of the website, what it contains, what it’s offering, if/how users interact with the site or each other, and so on.

Different websites require different considerations to be addressed in the Terms of Use. For example, a website that is offering access to copyrighted information (either paid or unpaid) must address the appropriate licenses granted to users, consequences for misuse of information, and various disclaimers for the information.

Where a website offers advice, it’s important that the Terms contain disclaimers for any information provided.

One of the beauties of the web is the unprecedented ability for individuals to share or offer something to many people simultaneously. Where a website serves as a platform for individuals to come together to sell items, barter, chat, post, or otherwise interact with each other, it’s important that the Terms state that all content and communication on the website is the responsibility of the individual participants. These Terms must contain strong disclaimers, as these types of sites are open to the public thereby allowing anyone to submit content which is often unpredictable and may draw liability

In any case, regardless of the site that you want to build, you should consult your lawyer with regards to the potential risks involved, and how they might be addressed in the Terms of Use.

How Are Terms of Use Agreements Binding?

Terms of Use that are accepted by virtue of browsing a site, otherwise known as “Browse-wrap Agreements”, are generally enforceable if they meet certain requirements. The case of Kanitz v. Rogers Cable Inc., among other questions, addressed the issue of whether Browse-wrap Agreements are enforceable.  In a nutshell, these requirements include:

1. A link to the Terms of Use is easily accessible to the site’s users
2. Clear notice of the terms is provided on the home page. Unless the site’s operator makes reasonable effort to bring the terms to the users’ attention, the notice should require users to review and agree to the terms.
3. The home page should include a button, where users can click and confirm having read and agreed to the terms.

The key to remember is that no two situations are alike. The manner in which your website will function, will also have an impact on the nature of the Terms of Use; not only in content, but in placement, prominence and acceptance procedures. In any case, contact your lawyer early on in the web development process, to avoid costly pitfalls down the road.