Sample Terms of Use Template

Creating Terms of Use is an essential way to protect your company's legal interests, manage the use of your website or app, and promote your business as a professional and trustworthy organization.

But it's not easy to create a Terms of Use agreement that is clear, legally binding, and relevant to your business.

We're going to talk you through everything you need to include in your Terms of Use agreement to make sure it's an effective, useful, and professional-looking legal agreement.

Terms of Use: Your Questions Answered

Before we look at what to include in your Terms of Use agreement, let's answer some common questions about what this agreement is and how it can help you.

What is a Terms of Use Agreement?

A Terms of Use agreement is a legal document. If you run a website, app, or virtually any other type of service, a Terms of Use agreement can help you:

• Set the rules of engagement with your service
• Explain how and why you may suspend or ban people from your service
• Avoid or manage any potential legal issues

Use the Terms of Use Generator to create this legal agreement.

If you're looking for the template, download the Terms of Use Template.

Is a Terms of Use Agreement Legally Binding?

Yes, a Terms of Use agreement is legally binding if it's:

• Clear
• Reasonable
• Lawful
• Agreed upon

The courts will usually enforce a Terms of Use agreement against either party if it's clear that both parties clearly agreed to it, and both parties knew what they were agreeing to.

However, there are certain clauses that courts will not enforce under any circumstances. For example, clauses that are designed to trick or exploit the user, or clauses that are forbidden by law.

Is a Terms of Use Agreement a Contract?

A Terms of Use agreement is a contract if it's clear, reasonable, lawful, and has been agreed upon.

Is a Terms of Use Agreement a Legal Requirement?

Creating a Terms of Use agreement is not a legal requirement. However, a Terms of Use agreement is a simple, effective way to help your company avoid legal issues and is thus highly recommended regardless of not being required.

Terms of Use Vs. Terms and Conditions

Legally speaking, a Terms of Use agreement is the same thing as a Terms and Conditions agreement.

We're using the phrase "Terms of Use" to describe a general agreement between you and your users. Different companies use different names for this type of agreement, including:

• Terms and Conditions
• Terms of Service
• User Agreement
• Acceptable Use Policy

These documents usually serve the same purpose but can be used in different contexts.

Terms of Use Vs. Privacy Policy

A Terms of Use agreement is very different from a Privacy Policy.

A Privacy Policy is a form of notice that explains the ways in which a company processes personal information.

A Privacy Policy is a legal requirement for almost every company that operates a website or online service under laws such as the EU General Data Protection Regulation (GDPR) or California Online Privacy Protection Act (CalOPPA).

Terms of Use Template

Here are some of the important sections you can (and should) include in your Terms of Use agreement.

Use the Terms of Use Generator to create this legal agreement.

If you're looking for the template, download the Terms of Use Template.

We've divided our template into three broad sections:

1. Information about the agreement
2. Rules for your users
3. Legal terms

1. Information About the Agreement

These clauses tell your users what your Terms of Use agreement is and what it does.

Introduction and Effective Date

The first section of your Terms of Use should fulfill two important goals:

• Introduce the agreement
• Provide the effective date of the agreement

Take a look at how Evernote does this:

Evernote strikes a great balance between formality and friendliness here. You can use your Terms of Use to build your brand and give your users a good impression.

Acceptance of the Agreement

Your Terms of Use should explain that your users accept your agreement by using your website or services.

This is particularly important if you operate a website. It won't be practical to obtain express acceptance of your Terms of Use from everyone who visits your website.

Here's how SEQ Legal does this:

We'll look at this in more detail below.

Reference to Other Policies

Your Terms of Use can also refer to any other agreements and policies that your company may have, For example, your Privacy Policy.

And, by the way, if you don't have a Privacy Policy you should create one right away.

Note that agreeing to your Terms of Use, your users aren't necessarily agreeing to your Privacy Policy and that separate agreements are not part of the Terms of Use. This is explained in Amazon's Alexa Terms of Use:

To reiterate: your Privacy Policy is a separate document to your Terms of Use.

Changes to the Terms

If you change your Terms of Use agreement, you should inform your users where possible, particularly if this is a significant change.

This example from Tito should give you some idea of how to handle this clause:

Tito states that:

• It may modify its terms
• It will notify users via email where possible but it isn't obliged to do so
• Users should review its terms regularly to stay updated

Note that you should take all reasonable steps to notify your users of changes to your Terms of Use so they can consider withdrawing from your service if they no longer agree with your rules.

2. Rules for Your Users

Your Terms of Use agreement is a way to explain what people can and cannot do on your website or service.

User Restrictions

Your website or app may be unsuitable for people under a certain age.

Here's how Bumble explains this:

It's also illegal to use certain services in certain places. Sports-betting service Bet365 makes this clear:

Emphasize that it is your users' responsibility to use your services only if it is legal for them to do so.

You should also include a general clause that outlines any specific behavior your users are not to engage in when using your website or service. Common restrictions include screen-scraping, spamming other users and reverse engineering proprietary software.

Here's how Bet365 restricts the commercial exploitation of its information, using automated software to extract anything from the website and other specific limits:

Payments and Billing

If you charge for your services, it's crucial that you set out the terms of payment very clearly, including:

• Whether your prices can change
• What will happen if a customer misses a payment
• How a customer can cancel their contract

Here's a short excerpt of a section like this from HubSpot's Terms of Service:

User-Generated Content

Many apps and websites allow users to upload and share their own content. Common examples of user-generated content include:

• Comments
• Forum posts
• Videos, pictures or audio

Your Terms of Use should set the rules for what sort of content is acceptable on your website or service.

Here's what Spotify's terms has to say about user-generated content:

Spotify's user-generated content clause achieves four important things:

1. It defines user-generated content
2. It requires that users only post content that is lawful
3. It establishes that Spotify may remove user-generated content
4. It contains an indemnification. We'll look at indemnification in more detail below.

Termination of Accounts

If your website or app involves membership or registration, your Terms of Use should make it clear that you can suspend or terminate your users' accounts.

Here's an example from SoundCloud:

It's up to you how you manage account suspension and termination. Just make sure you have a clear system. You should also leave yourself a lot of discretion.

3. Legal Terms

You should construct your Terms of Use in anticipation that you might one day end up in court. The following clauses will help you minimize the damage associated with any potential legal trouble.

General Disclaimers

You should take every reasonable step to ensure that you don't cause any loss or harm to your users.

However, sometimes, despite your best efforts, problems may occur. Your Terms of Use should contain disclaimers that aim to protect your company against the impact of any such problems.

Most Terms of Use agreements include a clause to inform users that the company is not responsible for things such as:

• Any malware contracted by using the site
• The content of any third-party websites to which the site links
• The accuracy of any information presented by the site

Here's how Aptitude Software disclaims responsibility for spreading malware via its site:

Aptitude also has a general disclaimer clause that disclaims the company's responsibility in the event of inaccurate or incomplete information, losses or damages from using the website and if a user violates laws by using the website:

Here's a disclaimer about links to third-party sites from Perform Parties:

Disclaimers like these warn your users that they use your website or app at their own risk. However, they aren't guaranteed to "stand up in court." You may be held liable for certain acts of negligence (we'll look at this in more detail below).

Exclusion of Implied Warranties

If your company supplies goods, the courts will read certain "implied warranties" into your Terms of Use agreement. The American Bar Association suggests that these implied warranties apply to the sale of online services and software.

The best way to understand an implied warranty is to contrast it with an "express warranty."

• An express warranty is a promise you make explicitly, like: "Our analytics app will increase your leads by at least 500 percent!" You have to keep promises like this or you might owe your user a refund or damages.
• An implied warranty is a promise that you don't actively make at all. The courts will read your Terms of Use agreement as though it contains certain implied warranties.

The principle of implied warranties (or "implied terms") applies in many countries. We'll focus on US law, where there are two main implied warranties:

• Fitness for a particular purpose - If someone buys your product for a specific reason, and you know that they're buying it for that reason, you guarantee that the product is fit for that purpose.
• Merchantability - Any product you sell must be of reasonable quality, correctly labeled, and you must provide the correct quantity.

You can use your Terms of Use to exclude (disclaim) both express and implied warranties. You can explicitly tell your users that you're not making certain promises. However:

• You shouldn't make express promises that you cannot keep
• Some jurisdictions will not recognize the exclusion of implied warranties

The UCC § 2-316 is pretty strict about the wording you must use if you want to try to exclude these implied warranties:

"[...] all implied warranties are excluded by expressions like "as is", "with all faults" or other language which in common understanding calls the buyer's attention to the exclusion of warranties and makes plain that there is no implied warranty."

This is why many companies use the phrase "as is" in their Terms of Use agreements, such as Cincinnati GI:

See our article about disclaimers for more information and examples on the variety of types of disclaimers you may need or want to include in your agreement.

Limitation of Liability

A limitation of liability clause protects your company's interests. It prevents your users from suing you in excess of a specific amount (which you determine).

There's a related clause, known as an "exclusion of liability." This prevents your users from suing you at all. Generally speaking, however, the courts are more likely to enforce a limitation of liability than an exclusion of liability.

Sounds complicated? Well, here's how Tracking Wonder explains its limitation of liability clause in a pretty blunt way:

A limitation of liability clause normally consists of:

• A list of the things that may cause a user a loss
• The amount of money that you're willing to pay out in damages if such a loss occurs

Here's an example from Twitter:

A rough translation of what Twitter is saying:

• We exclude any liability for any losses you incur by using our site, insofar as it is legally possible to do so.
• If it turns out that we are liable for a loss, you agree only to sue us for $100.

Note that Twitter's limitation of liability clause is in all caps.

UCC § 1-201 requires that certain contractual clauses (such as a limitation of liability) are "conspicuous." Using upper-case letters is one way to achieve this.

Indemnification

An "indemnification" or "hold harmless" clause generally applies to services that allow user contributions.

Let's say one of your users posts something defamatory on your website. The defamed person sues your company for $1 million. You spend $100,000 on legal fees defending the case. You lose.

If the user who posted the defamatory content has agreed to an indemnity clause, you can then sue that user to get your $1,100,000 back.

Here's an example of a clause like this from Flick:

Choice of Jurisdiction

You can use your Terms of Use to determine where any legal dispute will take place.

Here's an example from Royal Gold:

Just like in a football game, a legal battle has a significant "home advantage." You'll almost certainly want to choose the legal jurisdiction in which your company is based.

Obtaining Acceptance to Your Terms of Use

We've seen that it is important for your Terms of Use to be clear and reasonable.

If you end up in court, these are not the only factors that the courts will consider when deciding whether your Terms of Use agreement is valid.

For your Terms of Use to be binding on a user, you must also try to ensure that the user accepts them.

But what's the best way to go about getting acceptance?

Clickwrap

Your Terms of Use agreement is much more likely to be enforced if your users actively agree to it, e.g., by reading it (or scrolling through it) and clicking a box stating "I agree."

This is known as a "clickwrap" agreement.

Here's Google's clickwrap mechanism:

The user can't create an account without clicking "I agree to the Google Terms of Service." If Google attempts to enforce this agreement, the user can't reasonably claim that they never accepted it.

Your users could agree to your Terms of Use when:

• Creating an account
• Installing an app
• Making a purchase

However, it's not possible for everyone to obtain explicit agreement in this way.

Browsewrap

If you're creating a Terms of Use agreement for your website (rather than an app or registration service) you probably don't want your users to have to click "I agree" before they can access your website.

In this case, you'll need to use a "browsewrap" agreement. Browsewrap means your users implicitly agree to your Terms of Use simply by browsing your website.

It's much harder to enforce a browsewrap agreement. A user could easily claim that they never read it, and, therefore, did not agree to it.

However, the courts are more likely to enforce your browsewrap agreement if you:

• Make sure your Terms of Use agreement is conspicuously displayed on your website.
• Ensure you include a clause in your Terms of Use stating that browsing your website constitutes acceptance of the agreement.
• Take every opportunity to draw your users' attention to your Terms of Use.

Summary of Your Terms of Use

Where applicable, include a clause in your Terms of Use that:

• Introduces the agreement and gives its effective date
• Obtains acceptance of the agreement
• Refers and links to your other policies e.g. Privacy Policy
• Grants you the right to make changes to the agreement
• Sets the rules about user-generated content
• Sets the rules around payments and billing
• Sets the conditions under which you may suspend or terminate a user's account
• Disclaims your responsibilities for the spread of malware, etc.
• Excludes implied warranties
• Limits your company's liability
• Indemnifies your company against any losses your users cause
• Determines your legal jurisdiction

Ensure you obtain acceptance of your Terms of Use, either by clickwrap (where possible) or browsewrap (if necessary).

Download Terms of Use Template

Use the Terms of Use Generator to create this legal agreement.

If you're looking for the template, download the Terms of Use Template as a PDF file or download the Terms of Use Template as a DOCX file. It's free.

This free Generic Terms of Use Template is available to download and it includes the following sections:

• Introduction
• Termination
• Links to Other Websites
• Governing Law
• Changes to This Terms of Use
• Contact Information