Creating Comprehensive Terms of Service

Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom.
Also note: This is not legal advice.

Introduction

Terms of Service are a vital legal document that protect both parties involved in any kind of business transaction. They provide the basis for understanding the rights and responsibilities of each party, as well as an avenue for communication should disputes or concerns arise. As the Genie AI team can attest, it’s essential for any business – large or small – to have comprehensive Terms of Service in place in order to fully protect their individuals and companies alike.
At their core, Terms of Service safeguard a business owner’s rights and establish customer expectation. In addition to setting out what behaviour is expected from customers, they also detail what services will be provided by the business and how liabilities between both parties will play out if there is ever a dispute. It’s important that Terms of Service are written in plain language so everyone can understand them without any confusion or ambiguity; clarity is key here to avoid any potential miscommunication down the line.
Terms of Service also offer protection to customers; they provide assurance that businesses will always meet their obligations on time and give customers clear remedies should this not be done so. Additionally, Terms of Service include clauses which limit or exclude liability in certain circumstances such as negligence or breach of contract; this helps businesses reduce the risk associated with legal action if court cases were ever taken against them. Finally, having clear Terms of Service promotes trust between a business and its customers by outlining expectations from both sides at every step; this creates an environment where accountability is paramount, so customers can be sure their rights will be upheld if there ever was a disagreement.
In conclusion, good terms underlie all successful businesses - no matter its size - as they give you peace-of-mind when working with other individuals or companies by protecting your respective interests while building trust between you both at the same time. That being said it’s essential that all terms are comprehensive yet easy-to-understand so everyone knows exactly what’s expected from them throughout any transaction before contracts are signed off on either side - luckily our Genie AI team has put together a step-by-step guide (as well as access to our vast library) on how to craft your own high quality terms without needing a specialist lawyer helping hand - just click below now for more information!

Definitions (feel free to skip)

Legal Binding Agreement: A legal document that establishes an agreement between two or more parties which is enforceable by law.

Defining Terminology: Clarifying and explaining the meaning of words used in a document.

Applicable Laws: Laws and regulations that must be followed in a particular state or country.

Alternate Dispute Resolution: A process for resolving disputes between two or more parties without going to court.

Enforceable: Having the power to be enforced or carried out.

Acceptable Use Policy: A set of rules that outlines the activities that are allowed and not allowed when using a business’s services or products.

Severability Clause: A clause in a document stating that if any part of the document is found to be unenforceable, the other parts will remain in effect.

Governing Law Clause: A clause in a document stating which laws will apply in the event of a dispute.

Opt-Out Policy: A policy that allows users to opt out of any services or products provided by a business.

Liability: Legal responsibility for any damages or losses incurred as a result of using a business’s services or products.

Disclaimer: A statement that limits or excludes a party’s liability for damages or losses.

Obligations: The duties, responsibilities or promises that one party has to another.

Privacy Regulations: Laws and regulations that govern the collection, storage and use of personal data.

Contents

• Understanding the Purpose of Terms of Service
• What Should Be Included in Terms of Service
• Defining Terminology
• Understanding Applicable Laws
• Providing Alternate Dispute Resolution
• Making Sure the Terms of Service are Enforceable
• Creating an Acceptable Use Policy
• Making Sure the Terms of Service are Accessible
• Including a Severability Clause
• Including a Governing Law Clause
• Developing an Opt-Out Policy
• Addressing Liability and Disclaimers
• Understanding Your Obligations to Users
• Ensuring Compliance with Privacy Regulations
• Including a Signature Line for Agreement
• Providing a Contact Email for Questions
• Updating the Terms of Service Regularly
• Communicating Changes to Users
• Ensuring Users Agree to Updated Terms of Service

Get started

Understanding the Purpose of Terms of Service

• Research the laws and regulations applicable to your business and industry
• Understand why Terms of Service are important and what they should cover
• Review Terms of Service from similar businesses and organizations
• Consider the needs and concerns of your customers and other stakeholders
• Discuss the purpose and scope of your Terms of Service with legal counsel
• When you have a complete understanding of the purpose of Terms of Service, you can move on to the next step.

What Should Be Included in Terms of Service

• Understand the legal requirements for your jurisdiction and include them in your terms
• List the services you provide and the responsibilities of both the user and the company
• Explain your payment terms, including refunds, cancellations, and subscription renewals
• Make sure to include a privacy policy that explains how you handle customer data and how it’s protected
• Include any disclaimers, warranties, and limitation of liability
• Outline the rules for user-generated content and the rights you reserve for user content
• Explain the process for handling disputes, including the applicable law and legal venue
• Specify the procedure for amending the Terms of Service and notification to users
• Make sure the terms are written in a way that’s easy to read and understand

How you’ll know when you can check this off your list and move on to the next step:

Once you have included all of the necessary elements in your Terms of Service and are sure that it is completely accurate and up-to-date, you can move on to the next step.

Defining Terminology

• Identify the key terms that need to be defined in your Terms of Service
• Research what definitions are most commonly used for these terms
• Create clear and concise definitions for each of the terms
• Make sure the definitions are consistent with applicable laws
• Double check that your definitions are both accurate and understandable
• When you have clearly defined all of the terms, you can move on to the next step.

Understanding Applicable Laws

• Research applicable laws and regulations related to your Terms of Service, such as consumer protection and privacy laws.
• Make a list of those that apply to your business, such as the GDPR, and how they will impact your Terms of Service.
• Consult with an attorney to understand the legal implications of your Terms of Service.
• Create a list of any additional laws or regulations that you will need to include in your Terms of Service.

When you have researched and consulted with an attorney about the applicable laws and regulations for your Terms of Service, you can check this off your list and move on to the next step, Providing Alternate Dispute Resolution.

Providing Alternate Dispute Resolution

• Research the requirements for providing an Alternate Dispute Resolution (ADR) in your jurisdiction and the jurisdictions your Terms of Service will apply to
• Select an ADR provider and process that meets the requirements
• Include provisions in the Terms of Service that explain the ADR process you’ve chosen and the steps customers can take to initiate the process
• Specify the language that will be used in the ADR process
• Once you’ve added the ADR provisions to your Terms of Service, you can check this step off your list and move on to making sure the terms are enforceable.

Making Sure the Terms of Service are Enforceable

• Consult with a lawyer to ensure the Terms of Service comply with applicable laws.
• Ensure the Terms of Service are written in clear and easily understandable language.
• Make sure the Terms of Service are binding and enforceable.
• Review the Terms of Service to make sure they are comprehensive, including all relevant terms.
• Test the enforceability of the Terms of Service by having a lawyer review and evaluate them.

You will know when you can check this off your list and move on to the next step when you have consulted with a lawyer and reviewed the Terms of Service to make sure they are comprehensive and enforceable.

Creating an Acceptable Use Policy

• Establish rules for user behavior and define what is acceptable and what is not
• Clarify the consequences for violating the terms of service
• Outline prohibited activities, such as spamming, using copyrighted material, etc.
• Specify what types of content are allowed to be posted on the website
• Explain the security measures users must take to protect their data
• Make sure the Acceptable Use Policy is in compliance with all laws and regulations
• When finished, review the policy and make sure it is clearly written and understandable
• After reviewing, the Acceptable Use Policy can be added to the Terms of Service agreement, and the next step can be tackled

Making Sure the Terms of Service are Accessible

• Make sure the Terms of Service are easily accessible on your website, so visitors can read and understand them.
• Place the Terms of Service in a visible spot on your homepage, and link to them in your website’s footer.
• Provide a link to the Terms of Service in your emails to customers.
• Include a link to the Terms of Service in the app store descriptions of your mobile apps.
• You’ll know the Terms of Service are easily accessible when you can easily find them on your homepage, in emails to customers, and in the app store descriptions of your mobile apps.

Including a Severability Clause

• Consider adding a severability clause that states that if a certain section of the terms of service is found to be unenforceable, it will not invalidate the entire agreement.
• Research how to phrase the severability clause in a way that is legally binding in the jurisdiction that applies to your terms of service.
• Ensure that the severability clause is included in the terms of service before finalizing the document.

You’ll know you’ve completed this step when the severability clause is included in the terms of service.

Including a Governing Law Clause

• Identify the laws of the state or country that will govern the agreement
• Include the governing law clause in the Terms of Service
• Make sure the governing law clause is in line with the laws of the state or country

Once you have identified the laws of the state or country and included the governing law clause in the Terms of Service, you can check this off your list and move on to the next step, which is developing an opt-out policy.

Developing an Opt-Out Policy

• Ensure that customers have the right to opt-out of any communications or services you provide.
• Include a clear description of the opt-out process, including any timelines (e.g. customers must opt out within 10 days of receipt of communication, etc.)
• If applicable, specify that customers must take additional steps to opt out, such as replying to an email or clicking a link.
• If applicable, include a section that specifies how customers can opt out of automated services.
• If applicable, include a section that specifies how customers can opt out of any services your company provides, such as a subscription-based service.

When you have included all the necessary information about the opt-out policy in your Terms of Service, you can check this step off your list and move on to the next step: Addressing Liability and Disclaimers.

Addressing Liability and Disclaimers

• Determine the extent to which your company is liable for any of the content or services on your website or platform
• Include liability disclaimers in your terms of service that outlines the extent of your liability
• In some cases, it may be necessary to include a disclaimer of warranties
• Consider addressing intellectual property issues, such as copyright and trademark infringement
• Decide how you will handle the issue of indemnification
• Specify the governing law and jurisdiction for your terms of service

You can check this off your list once you have included all the necessary disclaimers and other liability statements in your terms of service.

Understanding Your Obligations to Users

• Become familiar with all applicable laws, regulations, and rules related to the services you offer.
• Understand the rights and responsibilities of both you and your users, including any user-generated content, intellectual property, and privacy concerns.
• Understand how to comply with local and international laws, such as GDPR, and any industry-specific regulations.
• Make sure that your Terms of Service properly reflect your obligations to the users of your service.
• Review any contracts or agreements between you and third-party service providers.
• Make sure that you have the necessary licenses and permissions for your services.

Once you have a good understanding of your obligations to your users and have taken the necessary steps to ensure compliance, you can check this off your list and move on to the next step.

Ensuring Compliance with Privacy Regulations

• Understand the local and international privacy regulations that apply to your business and to your Terms of Service
• Consult with a lawyer to ensure your Terms of Service comply with all the applicable regulations
• Include a Privacy Policy that clearly outlines how you will protect user data
• Ensure that all user data is securely stored and protected
• Make sure there are clear procedures in place for how user data will be collected, stored, used and destroyed
• Explain the rights and options users have regarding their data
• Allow users to opt-out of data collection, storage and usage
• Make sure all users are informed of and agree to the Terms of Service before using the service

You will know when you can check this off your list when you have consulted with a lawyer, drafted and included a Privacy Policy, made sure all user data is securely stored and protected, explained the rights and options users have regarding their data, allowed users to opt-out of data collection, storage and usage, and have ensured that all users are informed of and agree to the Terms of Service before using the service.

Including a Signature Line for Agreement

• Include a provision in the Terms of Service that requires the user to agree to the terms by signing the document
• Make sure that the signature line is clearly stated and easily understood by the user
• Provide a field for the user to enter the date of their agreement
• Include a statement that electronically signing is the same legally as signing the document in person
• Make sure that the signature line is included at the end of the Terms of Service document
• When you’re done, you’ll have provided a signature line for the user to agree to the Terms of Service.

Providing a Contact Email for Questions

• Research the best email address for contact about the Terms of Service (TOS)
• Make sure to provide an address that is monitored frequently
• Include the email address in the TOS document
• Test the email address to make sure it’s working correctly
• Once you’ve checked off all the above, you can move on to the next step of Updating the Terms of Service Regularly.

Updating the Terms of Service Regularly

• Set up a system to remind yourself to review and update your Terms of Service regularly.
• Decide how often you will review and update the Terms of Service.
• Make sure to include an effective date to the Terms of Service.
• Explain in the Terms of Service that they may be updated and that users are responsible for keeping up with the changes.
• When changes are made, communicate them to your users.

How you’ll know when you can check this off your list and move on to the next step:

• When you have set up a system to remind yourself to review and update your Terms of Service regularly, have decided how often you will review and update the Terms of Service, included an effective date to the Terms of Service, and explained in the Terms of Service that they may be updated and that users are responsible for keeping up with the changes, you can check this step off your list and move on to the next step.

Communicating Changes to Users

• Notify users of changes to the Terms of Service via email, blog post, and/or other channels
• Ensure that users are given the opportunity to review any changes before they are implemented
• Clearly explain the reasoning behind any changes made to the Terms of Service
• Allow users to provide feedback on changes prior to them being implemented
• Make sure users are aware of the date when the changes will be effective
• Check that users have had the chance to review and accept the updated Terms of Service before they go into effect
• Once users have been notified and have accepted the updated Terms of Service, you can check this step off your list and move on to the next step.

Ensuring Users Agree to Updated Terms of Service

• Create an explicit opt-in checkbox that requires users to agree to the updated Terms of Service before they can use the product/service.
• Identify a way to store the date and time when the user has agreed to the updated Terms of Service.
• Add a clause to the Terms of Service that outlines the consequences of not agreeing to the updated Terms of Service.
• Build a mechanism to remind users of the Terms of Service when they log in or use the product.
• You will know this step is complete when you have a system in place that requires users to agree to the updated Terms of Service before they can use the product/service.

FAQ:

Q: Is there a difference between Terms of Service and Terms and Conditions?

Asked by Maddie on April 3rd 2022.
A: Yes, there is a difference between Terms of Service (TOS) and Terms and Conditions (T&C). TOS usually outline the rules and regulations that govern the use of services or products, while T&C focus more on the legal rights, responsibilities, and obligations between two or more parties involved in a contract. TOS are generally broader in scope, while T&C are more specific.

Q: How do I ensure my Terms of Service are legally binding?

Asked by Julian on June 7th 2022.
A: To ensure your Terms of Service are legally binding, you must make sure they meet the requirements of your local jurisdiction. This includes ensuring that all parties have read and accepted the terms, that there is mutual consent to the terms, and that all parties understand their rights and obligations. Additionally, it is important to ensure that your terms are clear and concise so that all parties have a clear understanding of what is expected from them.

Q: What should be included in a comprehensive Terms of Service?

Asked by Jackson on August 1st 2022.
A: A comprehensive Terms of Service should include any relevant information regarding the services or products being provided, the rights and responsibilities of both parties involved in the agreement, any applicable terms and conditions, any applicable laws or regulations, any applicable fees or charges associated with the service or product, any dispute resolution policies or procedures, any warranties or guarantees provided by either party, and any other relevant information as necessary.

Q: Is it necessary to have a lawyer review my Terms of Service?

Asked by Emma on October 19th 2022.
A: While it is not always necessary to have a lawyer review your Terms of Service before they are put into practice, it is highly advisable to do so if you want to ensure that your terms are legally binding and enforceable. A lawyer will be able to review your terms and provide advice on how to make them legally binding as well as provide guidance on any potential legal issues that may arise. Having a lawyer review your terms can also help to protect you from potential liabilities should anything go wrong in the future.

Q: What do I need to consider when drafting my own Terms of Service?

Asked by Logan on December 8th 2022.
A: When drafting your own Terms of Service, it is important to consider the nature of your business model as well as the jurisdiction in which you operate. It is also important to consider any applicable laws or regulations as well as any industry standards that may apply to your particular sector or business model (e.g., SaaS, Technology or B2B). Additionally, you should consider any specific needs you may have for your particular services or products as well as any specific requirements from customers or users concerning the use of those services or products. Finally, make sure your language is clear and concise so that all parties understand their rights and obligations under the agreement.

Example dispute

Suing over Violation of Terms of Service

• A plaintiff might raise a lawsuit which references a terms of service if they believe that the terms of service have been violated in some way.
• The plaintiff must be able to prove that the terms of service have been violated, and that the defendant was aware of the terms of service, and that they did not abide by them.
• The plaintiff must also be able to prove that they have suffered some kind of damage or injury as a result of the violation.
• The defendant might be liable for damages, depending on the severity of the violation and the amount of harm caused.
• Settlement could be reached between the parties, or the court may decide to issue an injunction or award damages.
• The plaintiff may also seek punitive or exemplary damages if the violation was especially egregious.
• Damages may be calculated based on the harm suffered by the plaintiff, or the court may decide on an equitable remedy.

Templates available (free to use)

Terms Of Service Agreement

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