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Are Terms of Service Legally Binding?

Are Terms of Service legally binding? How can Terms and Conditions be enforced?

In this post, we answer these questions and show you how to write a terms of service document that can actually help to protect you and your business from legal liabilities.

What does “Terms of Service” mean?

Terms of Service – also known as Terms and Conditions (T&C), Terms of Use, or End User License Agreement (EULA) – are a contract between you, the provider of a service, and your users.

Are Terms and Conditions legally binding?

Since they are a contract, terms and conditions are legally binding to every extent.
When you set your terms of service and users agree to them, they formally accept a legal agreement. That’s also why you need to notify your users if you make any changes to your document.

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More on compliance for websites and apps

This article is a part of our series on compliance for websites and apps. Read also:

👉 4 Reasons Why You Need A Privacy Policy

How can Terms of Service be enforced?

The first step to an effective and enforceable Terms of Service is to have an accurate and legally sound document. Next, you need to make sure that your users can easily access and read it.

The best way to do it is usually by giving your users some way to acknowledge that they’ve seen and have accepted your Terms. Without a clear, provable action from your users’ side, it can, in some cases, be more difficult to enforce your Terms of Service.

Here’s what you should do:

Write your terms of service in a clear and understandable language. This way, your users can easily understand what they’re accepting;
Make them conspicuously visible throughout your website or app. Aside from the standard linking from the footer of your website, it’s highly recommended that you link these documents in locations that allow your user to indicate that they’ve read your terms. For example, via account creation forms, or comment forms. One common way to do this is by adding an unchecked checkbox for users to click and indicate “yes, I’ve read and agreed to the terms and conditions”.

Remember to keep track of these actions, so that you can be able to prove that users read and agreed to your terms.

Once users have agreed, you can freely enforce the terms set out in your Terms of Service document (as long as they do not violate applicable law). So for example, if a user uploads content that is in violation of your terms, you can rightfully choose to suspend or remove their account.

Lastly, keep in mind that terms of service apply both ways. Therefore, you are also required to act in accordance with the terms you’ve set out. For example, if you’ve stated that refunds are available, you must abide by that rule.

How to write an effective Terms of Service document

For your Terms of Service to be effective, they have to:

properly identify yourself and your product/service (users must be able to reach you with questions regarding policies or operations);
describe the service that your site provides and how it should be used (to avoid liability: you have no way of knowing all the potential ways in which your product or service might be used or misused); and
contain affiliate-specific clauses.

While the full content may vary based on the particulars of your business, Terms of Service should at least include these elements:

Identification of the business and contact information
Description of the service that your site/app provides
Information on risk allocation, liability, and disclaimers
Warranty/Guarantee information (where applicable)
The existence of a withdrawal right (if applicable)
Safety information, including instructions for proper use (where applicable)
Terms of delivery of product/service (where applicable)
Rights of use (if applicable)
Conditions of use/purchase (eg. age requirements, location-based restrictions)
Refund policy/exchange/termination of service and related info
Info related to methods of payment (where applicable)
Any additional applicable terms

💡 Check the full overview here.

iubenda’s Terms and Conditions generator

Generating and setting up your Terms and Conditions with iubenda is pretty straightforward, and you’re guided along the way. Our Terms and Conditions Generator lets you easily generate and manage terms and conditions that are professional, customizable from over 100 clauses, available in 10 languages, drafted by an international legal team, and up to date with the main international legislations.

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The solution to draft, update and maintain your Terms and Conditions. Optimised for eCommerce, marketplace, SaaS, apps & more.

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