Updated November 16, 2020:

A terms of service agreement, also called terms and conditions or terms of use, is a document that covers a range of issues related to the behavior of a website or service user. The document includes items related to third-party websites, content ownership, copyright notices, payments, and additional information.

An Overview of the Terms of Service Agreement

The terms of service agreement can provide your business with a framework for terminating or restricting a user's access when the agreed-upon contract has been violated. For example, if you own a web-based service, the terms of service agreement set expectations for users entering your website.

One common feature of a terms of service agreement is a disclaimer that states the owner of the website cannot be held liable for any incorrectly displayed information. It's critical to structure your terms of service agreement in such a way that it represents your company and the services it offers. Otherwise, you could set yourself up for liability issues. As such, try to avoid using a terms of service agreement template and focus on including key components.

Another common feature in any terms of service agreement is the privacy policy. Including a privacy policy helps protect valuable company information. While this policy is an important aspect of the agreement, you want to make sure your clients are on the same page before providing any services for them. The terms of service essentially put your policies into one clearly worded document so the customer understands what's expected of both parties.

Having your clients sign a terms of service agreement saves yourself a lot of future headaches over misunderstandings and miscommunications. If you own a website, mobile app, or software, implementing a terms of service agreement is crucial.

You can call your terms of service agreement by any acceptable name. The most common choices are:

  • Terms of service (ToS or TOS)
  • Terms of use (TOU)
  • Terms and conditions
  • Terms
  • User agreement

For example, eBay opts for the term “user agreement” while Twitter calls its terms of service page “terms of service.” Whatever name you choose, make sure the text is easy for the average user to understand.

Why You Should Always Read the Terms of Service

Many web and mobile users skip the terms of service and agree to the text without comprehending what's included in the document. For this reason, people are often surprised to learn of unexpected changes or shocking clauses found in online terms of service agreements. The mobile app Instagram, for instance, faced criticism from users because its terms allowed the company to sell user photos to other companies for marketing purposes.

Since you probably skip the terms of service agreement on everyday websites, here are some important individual rights that you could be giving up:

  • The company can own or sell your photos.
  • You may be unable to delete your account.
  • The company may track your internet activities.
  • Your user data may be handed over to law enforcement without your permission or knowledge.
  • You may be banned from filing a lawsuit against the company.
  • The company may hold onto a piece of content you deleted.
  • Terms can change at any moment without notice.

Since companies have varying definitions of privacy, fair, and similar terms, it's important to always read the terms of service agreement before using a website or mobile application.

Creating a Terms of Service Agreement

If you have a web platform or mobile app to share with users, there are some important steps to take in creating comprehensive terms of service agreement.

  • Define what a terms of service agreement is and state that the user must agree to it to use the company's service.
  • State which website or application the user is accessing.
  • State which product or service your company provides.
  • Outline rules and regulations for using the product or service.
  • Include an acknowledgment by the user, who agrees to abide by the rules when accessing the service.
  • Indicate when the terms of service agreement is required.
  • Include limitations on disclaimers and liability.
  • State who owns the content and intellectual property.
  • Detail the company's privacy policy.
  • Cite the consequences of not agreeing to the terms of service.

If you need help drafting a terms of service agreement for your business, post your job 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.