Every website, app, and online service needs a Terms of Service agreement (also called Terms and Conditions, or Terms of Use). If you do not have one, users have no defined rules to follow, you have no mechanism to remove bad actors, and you may be exposed to significant liability that proper terms would have limited or eliminated entirely.
What Terms of Service Actually Do
A well-drafted Terms of Service agreement accomplishes several things at once:
- Defines who can use your platform and sets the rules for acceptable use
- Limits your liability when things go wrong
- Establishes who owns the content on your platform
- Gives you the right to terminate accounts or remove content that violates your rules
- Specifies how disputes will be handled — often through arbitration rather than litigation
- Protects your intellectual property
- Sets payment terms and refund policies for paid services
The Essential Sections Every Terms of Service Needs
Acceptance of Terms
Your terms must explain how users accept them. The most common approach is a "clickwrap" agreement — a checkbox the user must affirmatively check before creating an account or completing a purchase. A mere link to the terms in a footer (a "browsewrap" agreement) provides weaker enforceability and has been rejected by courts in some cases. For anything consequential — a paid subscription, an account with significant user data — a clear affirmative acceptance step is important.
Eligibility
Who can use your service? Common restrictions include age minimums (18 or 13 with parental consent), geographic restrictions, and prohibition on users who have been previously banned.
User Conduct and Prohibited Activities
Define what users cannot do. Common prohibitions include using the platform for illegal purposes, posting harmful or offensive content, attempting to hack or interfere with the service, impersonating others, scraping data, and violating others' intellectual property rights. The more specific you are, the stronger your enforcement position when violations occur.
Intellectual Property
Address ownership of two things: your content and user-generated content. Your branding, code, design, and original content remain yours. For user content — posts, uploads, reviews — you need a license to display and process it even though the user retains ownership. This license must be spelled out.
Disclaimer of Warranties and Limitation of Liability
This is often the most legally significant section of the terms. A well-drafted limitation of liability clause caps your financial exposure to users. Without it, a user whose business suffers because your platform was down could theoretically claim consequential damages far exceeding what they paid you. Courts do enforce limitation of liability clauses, but they must be clearly written and conspicuously placed.
Limitation of liability clauses must be enforceable to protect you. Courts have thrown out liability caps that were buried in fine print, inconsistently applied, or that conflicted with other provisions. Drafting that actually holds up requires more than a template.
Indemnification
Require users to indemnify you — to cover your costs, including legal fees — if their use of your platform causes you to be sued by a third party. If a user posts defamatory content on your platform and the subject of that content sues you, the user should be responsible for defending you.
Dispute Resolution
Many Terms of Service require disputes to be resolved through binding arbitration rather than litigation. Arbitration can be significantly faster and less expensive than court proceedings. A class action waiver — prohibiting users from joining with others to sue as a group — is commonly included as well, though its enforceability varies by state and context.
Governing Law and Jurisdiction
Specify which state's law governs the agreement and where any legal proceedings must be filed. This prevents a user in another state from forcing you to litigate on their home turf.
Changes to the Terms
Reserve the right to modify the terms, and specify how you will notify users of changes. Some platforms require affirmative acceptance of updated terms; others rely on continued use as acceptance. Either approach can work if it is clearly stated.
Termination
Specify when and how accounts can be terminated — both by the user and by you. Your right to terminate for violations of the terms is essential for platform management.
Terms of Service Versus Privacy Policy
These are two separate documents that serve different purposes. The Privacy Policy explains what data you collect and how you use it — it is required by law and focuses on the user's rights. The Terms of Service sets the contractual rules of your relationship with users. Both are necessary; neither substitutes for the other.
At The Juris Institute, we prepare Terms of Service agreements drafted to the specific nature of your platform — whether you are running an informational website, an e-commerce store, a SaaS product, a marketplace, or a content platform. Flat-fee, virtual, and nationwide.