Crucial elements of a Terms of Service Agreement

By: Aaron Kelly | Posted: 16th December 2010

Terms of Service: Why they are importan
Hosting a business website without preparing a well-written Terms of Service (ToS) statement is equivalent to keeping an inner-city apartment door unlocked. It's an unwise decision that can cost business owners a tremendous deal of money, time, and even the hair on their scalps. Anytime an individual offers advice, copyrighted content, a product, or a service online, a well-written Terms of Service statement is absolutely mandatory.

Your Terms of Service (ToS) is essentially an easily accessible and visible statement that defines the relationship between your site and its visitors. As soon as a user stumbles onto your site, he or she is automatically agreeing to the terms specified. In some instances, you may want to force a visitor to manually agree by clicking a box. This is especially recommended for instances in which you offer users their own business or web-store account.

In general, a Terms of Service agreement explains what you find acceptable and unacceptable. It provides you with an opportunity to lay out specific rules of behavior and conduct that, if practiced by the user, gives you the right to terminate their relationship with your business. It also gives you a chance to remove any liability that you could potentially incur, and that could cause you become the victim of a devastating lawsuit. Most importantly, a carefully constructed ToS service or agreement protects your copyrighted materials and intellectual property from theft.

Creating a detailed Terms of Service statement requires first carefully analyzing the nature of your business. If for instance you are providing health-related advice, recommendations, or products, you'll need to write a thorough disclaimer warning potential clients that the information provided on your site isn't equivalent to a professional medical opinion. Furthermore, you should direct all clients to seek a consultation with a certified physician.

If on the other hand you're promoting methods on how to earn money from home, you'll need to make it clear that the results of such methods vary. Therefore you cannot guarantee the client's success. And in case your site features copyrighted articles and guides, you must let the reader know that sharing, disseminating, or selling your materials is illegal and will be prosecuted to the full extent of the law.

The exact components of a Terms of Service agreement will vary depending on the nature of your business. Nevertheless, the following are the five of the most important guidelines to consider.

#1. In case your business website allows a user to create and access an account, you must specify the terms associated with this. How does the account system work? What is required to maintain an account? What behavior could lead to the termination of this account?

#2. If your site allows a client to submit user-generated content, then you must make it perfectly clear that any derogatory or illegal material-harassing comments, copyrighted materials, racist rhetoric, etc-will not be tolerated.

#3. When allowing users to submit their own content, you must also inform them that such submissions automatically become your property. In addition, you reserve the right to modify, copy, distribute, and use their submissions as you see fit.

#4. A provision concerning the use or dissemination of your copyrighted materials is a must have for any business. This is the only way to ensure a user doesn't outright copy your whole website and reproduce it elsewhere. Without this statement, you don't have the power to sue them and have the copy-cat site removed from the Internet.

#5. An extremely well written stipulation must be provided concerning your lack of liability. It must specify that any incidental or consequential damages incurred by the user, no matter how caused, are not your fault. Keep in mind that this will likely be the most detailed section of your ToS statement.

Keep in mind that these are just a few of the many points you must take into consideration. The truth is that compiling a precise Terms of Service (ToS) agreement is extremely difficult, and requires a thorough attention to details, not to mention a thorough understanding of business laws and regulations. It's for this very reason that you should consider seeking the assistance of a professional attorney.

Though the initial costs may seem scary and even unnecessary, keep in mind that a professional written ToS statement could potentially save you much more in the future. As an amateur, you run the risk of missing pivotal points that could one day make you liable for something you never intended. Furthermore, if your goal is to expand your business into a multi-million dollar empire, it becomes that much more important to make an initial investment in a quality ToS agreement.

Regardless, once you've prepared or have had a professional written Terms of Service statement prepared, you must post it in a highly visible spot on your website. Typically business owners provide a link to it at the bottom of their website's homepage. Though users implicitly agree to your terms upon accessing your site, a shifty-handed visitor could argue that your ToS statement was too difficult to find. As should be evident by now, a business owner can't ever be too careful when it comes to protecting his or her interests.
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Tags: business website, own business, business owners, instances, consultation, intellectual property, relationship, web store, tos, money time, scalps