Updated November 19, 2020:

Every business should know how to write terms of service, which are the rules users have to follow in order to use your service. Most people assume that the small print of terms and conditions can only be written by lawyers and contain jargon-filled text that doesn't matter. In fact, most people don't even bother reading the terms for most services and websites they use.

However, that doesn't mean that terms and conditions aren't important. Every time you provide a service to users, you should require them to accept your terms of service. To write effective terms and conditions, you should have a firm understanding of the following:

  • When the terms are useful
  • What types of precautions are necessary for your service and situation
  • Where the terms can be found
  • How users will access the terms

Once you know how terms and conditions fit with your service, you can draft the clauses and provisions in your terms of service. Most desktop apps have an EULA (End-User License Agreement) instead of traditional terms and conditions, but businesses can use both. Mobile apps that connect to servers and have online elements are increasingly using terms and conditions, as well as an EULA. Terms and conditions aren't required by law and don't have any regulations, unlike privacy policies.

Do You Need Terms of Service?

Terms and conditions are important for businesses that offer services to a large number of people. They are especially common and useful for websites and mobile apps because the services are available to the general public. Companies that offer services to a smaller group of people, such as a consulting firm, can instead use a more traditional contract instead of general terms of service.

There are a number of reasons to have terms and conditions, including:

  • Protecting your business from user misunderstanding and uncertainty.
  • Preventing users from abusing or misusing your service. Terms and conditions are legally binding and outline what happens if users don't follow your guidelines.
  • Guarding your content from theft or misuse. Terms and conditions can legally tell users that the content you are providing belongs to you.
  • Restricting liability so that you aren't held responsible for errors that could arise in your service and content.

What Should You Include In Your Terms and Conditions?

You should tailor your terms of service to match the type of service you are providing. In order to make the most of your terms of service as a powerful tool, consider what you include in them.

If you collect your users' personal information, such as name, address, or credit card number, you should include a privacy policy that states how you store and use that information. If your company requires user accounts or subscriptions, your terms and conditions should explain the account rules and how accounts can be ended if they are abused.

Where Should You Put Your Terms and Conditions?

Before completing the terms and conditions, you need to decide where the information will be located and how users will find it. The location of your terms of service will determine how they will be written.

Many companies put their terms and conditions in a location where users are required to access it before continuing. A website that sells products could include terms and conditions as a pop up when a new customer comes to the site. If this is the case, the terms and conditions should be clear and catchy so that users want to read them and know what they are agreeing to.

Many companies require their users to accept the terms and conditions before they can continue with the service, such as requiring users to click a box that they have read the terms or making users initial a form before they can set up their account.

Terms and conditions are also commonly posted in the following locations:

  • FAQ page
  • Website footer
  • Community discussion forum

What Is the Tone of Your Terms and Conditions?

Terms and conditions are often filled with legal jargon, but they can also be written with a friendly tone that makes people want to read them. If terms are too intimidating, potential users and customers could get scared away.

If you need help with how to write terms of service, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.