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Terms of Service Basics - Bite-Sized Legal #4

Terms of Service Basics - Bite-Sized Legal #4
By Bite-Sized Legal • Issue #4 • View online
Hello,
This issue was originally posted on the Indie Hackers forum back in 2020. Chances are that you haven’t seen it, so I post it again here.

What is Terms of Service?
Terms of Service are an agreement between you and your user. It sets the terms and conditions of the use of your product.
So, you have a website and a user lands on it. They roam around, have a look at your product, and sign up. They pay for using the product.
When signing up (or using it without signing up), you want to set certain conditions about the use of the product. That’s where ToS come in handy.
With the ToS you tell the user: “Hey user, I’m glad you are signing up, but you need to accept these terms and conditions. I can’t let you use my product if you don’t accept my terms. Take it or leave it.”
If you don’t offer a product that requires signing up (you offer a free product, website content, etc) you may want to set the terms and conditions for using your website.
You tell the user: “Hey, if you keep using this website/free product, it means you accept to use it according to the terms I set. This is my website and I want my users here to behave in the way I want. If you stay here it means that you accept my terms.”
This is non-negotiable.
Non-Negotiable? Really?
Yes, ToS are non-negotiable. You just give the users the choice between accepting and leaving. But this doesn’t mean that you cannot offer different terms to some of the users.
Enterprise-tier clients usually require a custom agreement. They will want to negotiate certain parts of the agreement with you. They’ll have lots of money to spend, so you’ll be willing to negotiate, too.
But for the clients that pay anything from a few dollars to whatever is below the Enterprise-tier level, you offer non-negotiable ToS on signing up or right before checkout.
Do I really need ToS?
It depends. There is no straightforward answer.
ToS are not obligatory by the law. You won’t be punished if you don’t have one in place.
But, operating your project without ToS means that your users use your product without a written contract in place.
If your users pay for your product, though, you may need to have some written statements regarding the transaction. In such a case, ToS are a convenient way to make such statements.
Everything may go well without ToS, though, but you may also have legal headaches in the future.
What kind of legal headaches?
It depends on your product. Here are a few examples to give an idea:
  • You may build a Zapier-like tool that somehow failed to send all the data to the other app and the user has suffered damages due to incorrect data. You are responsible, but if your Terms and conditions limit your liability, you’ll get by for cheap.
  • You have built a fitness tracking app. Your copy says: “Use this app to get a six-pack”. Users expect the app to get them in shape, but it doesn’t, and they sue you. It is a frivolous lawsuit that you’ll likely win, but still, it will drag you to court.
  • You sell a photo-editing app that someone uses for bullying. Angry parents of bullied kids think you should be held responsible. However, if using your app for bullying purposes is against your Terms and Conditions, you are not responsible.
What should be included in the ToS?
Again, it depends on your product, but you should at least have:
  • What you provide (the product) and what should the user do to get it (sign up, pay…)
  • Conditions of use of the product (and what is prohibited)
  • Intellectual property clauses
  • Limitations of your liability
  • Termination of contract
  • Disclaimers
When to get ToS?
It is in your best interest to have them as soon as you put anything on the internet.
It is highly recommendable to have them as soon as you ask for money for the product. You may be obliged to have it at this point, depending on the product.
It is a must to have them as soon as things get serious. At this point, it is nice to get to have them tailored to your business.
Where to get ToS?
There are 3 ways people get ToS:
  1. Copy from another website. I don’t recommend this at all for two reasons: 1. Getting it right is just a lucky coincidence (only if you have a similar product). 2. You are likely to do a copyright infringement.
  2. Online ToS generator. This is the most convenient way for indie hackers - affordable, fast, and get you covered. Some do a very good job. I cannot recommend a specific generator.
  3. Lawyer. They also use templates, but you’ll have a human being thinking about your business when drafting it. It can be quite expensive. Having your existing ToS reviewed by a lawyer (instead of drafted) is less expensive.
Any questions? Do you need help with the Terms of Service for your own website or app? Reply to this email and I will answer your questions.
Cheers,
Petar
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