A ToS agreement, or terms of service agreement, is a set of rules and conditions that a provider attaches to an internet-delivered product or software service. A ToS agreement establishes a basic contract between the individual user and the service provider. The user must agree to the provider's terms of use in order to use the service. These agreements are very common in our digital world, and most people understand the basis of them.

Terms of service may also be called terms of use (TOU) or terms and conditions. Terms of service, terms of use, and terms and conditions all indicate the same type of user-provider agreement. Some websites, such as Twitter, use the phrase Terms of Service. eBay and other websites utilize the phrase User Agreement. On other websites, including Amazon, Conditions of Use refers to the same type of service agreement.

It's not a legal requirement to include this type of agreement on your website. However, it is strongly recommended. On the other hand, you are legally required to have a Privacy Policy if you collect personal data, such as first and last names, email addresses, shipping addresses, dates of birth, or billing information.

Elements of a Terms of Service Agreement

From the provider's perspective, no matter which platform or medium you use to connect with your clients, a ToS agreement can help you establish important rules and conditions that will ultimately protect your company. Common elements of a ToS agreement include:

  • Intellectual property statements: Inform users that your website, logo, content, etc. are your property, and are protected by copyright laws. Explain the intellectual property rights of user-created content, and how users may share such content. Include the process to occur if a third party finds copyrighted material on your site (e.g. forums).
  • Privacy policies: Explain how your service may use the information provided by users.
  • Account information: Explain how users may disable their accounts, opt-out of email lists and other marketing channels, or change their account information.
  • Community guidelines for content and sharing: Include your right to shut down an account if it sends abusive or spamming messages.
  • Liability provisions: Include a warranty disclaimer that attempts to limit your website's liability in instances where errors are found in the website's content. Notify users that you may not be held responsible for any errors or incomplete, inaccurate, or unsuitable information.
  • Accountability provisions: Include an arbitration system for user grievances, if necessary.

Comparing Terms of Service Agreements, End-User Licensing Agreements, and Service Agreements

A terms of service (ToS) agreement is similar to both an end-user licensing agreement (EULA) and a service agreement, but there are some key differences between the three types of contracts.

An EULA is an agreement between the user and provider of licensed out-of-box software products. However, many services don't require a license for the user to operate them, hence the updated terminology. Terms of service agreements may be found on many different kinds of software, from graphic design programs and word processors to advanced professional software or statistical analysis services. Mobile and desktop applications often contain EULAs, but these days, providers may decide the phrase terms of service is more relevant.

On the other hand, a service agreement is used when a customer and provider exchange services for compensation. Sometimes this agreement exists verbally, such as when a customer visits a nail salon to get her nails done. Oftentimes it exists in written form, such as when a website owner contracts with a freelance writer.

In general, written service agreements are more necessary when the contractual terms are complex or contain many provisions. The agreement includes elements such as a description of the work to be done, the price, the end date, frequency and billing dates, insurance clauses, confidentiality, and other important aspects. It may be used for a one-time service, or for an ongoing service that renews itself until either the user or provider cancels it.

If you provide services to your customer or clients, it's best to use service contracts any time you intend to perform services for customers and want to protect your own interests, ensure you are compensated accordingly, and prevent potential customer disputes.

If you need help understanding a ToS agreement, 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, Stripe, and Twilio.