1. Meaning of Terms of Service
2. Reasons to Use Terms of Service

What are terms of service? In most cases, terms of service (ToS) refer to regulations that are attached to a piece of software by its providers. Terms of service can also apply to Web-based services and products.

Meaning of Terms of Service

When the provider of a piece of software or Web-service attaches regulations to these items, those regulations are known as the terms of service. In the digital world, ToS are commonplace. Before you can use a piece of software, you are usually required to agree to the regulations in the ToS.

End-user licensing agreements (EULA) and ToS are very similar. The difference is in the products to which they are attached. Software products, such as video games, will usually use an EULA, whereas ToS apply to people using a service. Terms of service can be used with virtually every type of software, such as programs dedicated to graphic design and word processors.

A ToS agreement can include a wide range of elements:

  • Accountability provisions
  • Liability provisions
  • Opt-out provisions
  • Privacy policies

It's also possible for a ToS agreement to outline an arbitration process that will help users resolve grievances.

In most cases, a ToS agreement will be used to define prohibited user actions. For instance, a ToS agreement for a Web-based discussion forum may prohibit users from posting content that others would find offensive. Essentially, a ToS agreement acts as a contract between a service provider and the people that are using the service.

Reasons to Use Terms of Service

There is no law requiring that websites use a ToS agreement. Having one of these agreements in place, however, is recommended. While websites are not required to have a Terms of Service agreement, they are legally required to have a privacy policy. These policies are meant to protect the sensitive data of users:

  • Email addresses
  • Names
  • Billing information
  • Shipping addresses

When users accept a ToS agreement, they are confirming that they will abide by a strict set of regulations while using a service. There are several different names for a ToS agreement:

  • Terms of Use
  • Terms and Conditions
  • Disclaimer

One of the main reasons your website needs a ToS is that it can help to prevent abuse. You can use the agreement to outline how users must behave while they are on your service, and if they don't agree to these rules, they will not be able to access your website or service. A ToS agreement also helps you preserve ownership of your content. When you own a website, you own everything on the site that isn't user-generated. This can include your content, logo, and your website's design.

In your ToS agreement, you can use language meant to notify your users that you own the content on your site and that unauthorized use of the content constitutes copyright infringement. Clauses related to content ownership are called Intellectual Property clauses.

With a ToS agreement in place, you can also reserve the right to terminate user accounts if they violate the agreement. If you include one of these clauses, you should make it clear that abusive users can have their accounts canceled and may also be permanently banned from the service.

Termination clauses are most commonly used with web services that require registration. This clause is also used to indicate that you will be monitoring how users behave while using your service.

Maybe the best reason to use a ToS agreement is that it can limit your liability. With a liability clause, you will notify the users of your service that you, the owner, cannot be held liable if there is a problem with the content on your website. This clause can also state that you aren't liable for the accuracy of the information on your site and can't be held responsible for how the information is used.

Lastly, the ToS agreement establishes Governing Law. For example, if you have registered and operated your website in the state of New York, you would include a statement in your ToS indicating that the agreement is governed by the laws of New York, as well United States law. You would need to update this section of your ToS agreement if you ever decide to operate your service in another jurisdiction.

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