Many online businesses want to limit their legal risk.  They publish Terms of Use on their website to limit warranties, control how and where claims can be made, and identify when they can revoke users’ use of the site.  Are these agreements enforceable?  Read these tips to learn how to create enforceable online Terms of Use and Privacy Policies.

Whether online or on paper, all agreements must follow the same basic contract law principles:  

  • The user must have notice of the terms of the agreement.
  • The user must consent to the terms.
  • The agreement must be fair. 

Practice Tip 1: Check the box

The user must have to complete an action to signify consent. Require the user to check a box that says “I consent” or “I agree” or “I accept” the Terms of Use before being permitted to proceed to the next step or next page.   

Practice Tip 2: Conspicuous Placement

To be enforceable, use conspicuous Terms of Use. It must be something the user can’t miss. For example, use a pop-up screen, a hyperlink to another page, or a scroll pane.  

  • Use simple text on a plain background. 
  • Omit colors, graphics, videos, and other distractors.
  • Use a clean font in a readable size.  
  • Place the Terms of Use in the footer of every page so the user can easily find it (for those few who read these documents). It is difficult to enforce an agreement that the user had the option to read once and then the link disappeared.  

Practice Tip #3: Save Your Records

Checking the box is not the end. How do you prove the user agreed to your online agreement? You do this by saving the user’s acceptance. Consult your IT specialist, but there are various tools to check-the-box, pop-up the Terms of Service, and save the user’s acceptance. 

Practice Tip #4: Skip the Legalese

Write your online agreements in simple, clear language. Skip the legalese and technical terms. Courts have refused to enforce online Terms of Use that are indecipherable gobbledygook. 

Practice Tip #5: Fairness

The website owner has the upper hand. Yes, most users will check the box without reading the agreement. To be enforceable, though, the agreement must be fair.  

You can limit the state in which a user can sue you. You can require the user to use arbitration instead of the court. You can limit your warranties. You even limit the remedy (how much money the user will receive if s/he wins).

However, don’t go overboard. 

If you are selling high-end items, it is usually unfair to prohibit refunds for returned items. The exception would be conspicuous “as-is, all sales are final” sales. If you are selling expensive personal services, it is usually unfair to deny refunds if you are unable to perform the service (absent a conspicuous notice of your no refund policy). Protect yourself, but also be fair to your customers.   

Practice Tip 6: Custom Online Terms of Use

While it is tempting to copy someone else’s Terms of Use or to buy a cheap DYI product, you should have custom Terms of Use. Find an experienced and knowledgable writer to draft your online Terms of Use. 

Each online business is different. An e-commerce store has different needs from a blog that has different needs from a social media site.

Here at Concerto Law, we have drafted dozens of enforceable online Terms of Use. While they are similar and contain (mostly) the same topics, they are all customized to your type of business.  

We are unabashed legal geeks here at Concerto Law and would love to help you with your online Terms of Use.  Whether you need custom Terms or just a review and polishing of your existing Terms, we can make this easy for you.