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by McAfee & Taft
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So, you’re ready to launch your new online business or mobile app. The website looks great, and the app tile has an elegant, simple design that’s sure to stand out on phone and tablet screens. Missing anything? Oh, yeah, that boring stuff that no one reads anyway…the terms of service.

Pull up terms of service on Google and you’ll see lots of templates for preparing them. But one size doesn’t really fit all here. While you may think that everyone will just accept the terms without reading them anyway, it actually does matter what the terms of service say.

The type of website or app that you offer will dictate the terms of service that you’ll want to utilize. For instance, sites that sell goods and services must make the conditions of sale clear. Sites that are designed as forums for interaction between users won’t need a lot of language about sales, but will need to spell out user conduct rules and the consequences for breaking them.

For most apps and websites, the terms can be broken down into a few categories:

User ground rules

If you have an interactive site where users can post content, you will want to limit your liability as the site owner for bad behavior by your users. Make it clear that the site does not permit the posting of infringing, illegal or defamatory material, and make it clear that as the site owner, you have the right to remove offending material or block users from the site if they offend. Spell out your policy for requesting takedowns and be clear that it is the user’s responsibility, not yours, to be sure that whatever they post doesn’t violate someone else’s rights. The keys here are clarity and consistency: Make it easy to understand what is and isn’t OK, and be consistent in your enforcement of any consequences. Don’t threaten consequences that it would be impractical to impose or would create unnecessary burdens for yourself. If you aren’t going to monitor the site closely, you don’t want to indicate that violations will be addressed within 24 hours. The terms of service should include a disclaimer of responsibility for user posted content.

Data collection

If your site collects information from users, the terms of service should include some type of privacy policy that addresses who is collecting the information, what they are going to do with it once it’s collected, and how it will be stored. If you don’t collect data, say so in your policy. The most important thing to remember about this section is that you must be clear about what you are promising to do to safeguard information, and you must fulfill whatever promises you make. The Federal Trade Commission can and will take legal action against you for violating consumer privacy rights.

Underage users

If you run a website or offer an app that is directed at children under the age of 13, there are special considerations. COPPA, the Children’s Online Privacy Protection Act, requires that you provide direct notice to parents of the name, address, telephone number, and email address of all operators collecting or maintaining personal information through the site or service and a description of what information the operator collects from children. You must also obtain verifiable parental consent before collecting personal information online from children, and you must give parents the choice of consenting to the data collection and use of a child’s information and give them access to their child's personal information to review. They must have the option to have the information deleted and the ability to prevent further use or online collection of a child's personal information. Children’s data must be handled with special care to maintain confidentiality, security, and integrity of information, which means that selling or releasing data to third parties could create liability. The best practice is to limit the time you keep personal information collected online from a child to only what’s necessary to fulfill the purpose of the collection, then delete it to guard against unauthorized access or use.

Disclosures

If the site or app focuses on selling goods or services, don’t hide information about warranties, pricing, safety, restrictions or qualifications of the products in the terms of service. FTC guidelines on fair advertising require that you clearly and conspicuously disclose all the information about an offer that is likely to affect a consumer's purchasing decision. It’s OK to use a hyperlink to tell consumers about less critical terms and conditions of an offer, but don’t bury key information in the TERMS OF USE/ TERMS OF SERVICE.

The best advice can be summed up this way:

  1. Be clear about what you're promising.
  2. Don't promise more than you can do.
  3. Do what you promised.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© McAfee & Taft | Attorney Advertising

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