Although most users of your website will not read your terms, this is an important part of your business. Having to argue in court is expensive, so a little investment to avert the risk is a pragmatic approach. This article highlights some of the most common points which your terms should cover so that the risks explained below do not crystallise.
Website terms are particularly important in sectors such as e-commerce, SaaS, educational platforms, or video streaming platforms i.e. where your website introduces your service offering.
In one recent scenario, we found 3 sets of contradictory provisions in a client’s terms. Contractual uncertainty is a recipe for dispute because none of the parties can say for certain what has been agreed.
Intellectual property rights include your brand, image, unique selling point, trademarks, logos, any copyrights in information and images used. It is extremely important to make users aware of these rights, how they can use them and to what extent they are permitted to use them. For instance, a competitor could copy your brand image and capitalise on the goodwill you have built up in your brand image. Your terms should make it clear that they may not do so.
This is because while you may be able to obtain other types of protection for your intellectual property rights such as trademark registrations, copyright protection, design rights, etc., it is usually easier to prove that a person has breached their contract with you (by breaching your website terms) than to litigate over other intellectual property protections you might have in place. Your website terms will also act as a deterrent to prevent misuse.
Where users can upload or post content and you have not set out any rights and rules, they can post anything they like. This may bring your business into disrepute. A website user may also try to limit the way in which their content can be used. Some other examples of issues that may arise include posting advertisements for the competition or protesting if you cite their words or images on social media. Therefore, your terms should clearly set out the ownership rights to content posted on your website, and rules around the use of such content to avoid disputes over these; and the actions you may take against users misusing your website.
Does your business sell to other businesses, consumers, or both? There are different laws governing different types of users – the law offers consumers more protection as opposed to businesses. This affects your practical commercial processes directly including the manner in which you need to provide certain information to your customers. For instance your sales, returns and refund processes, communication with the consumer, and liability for defects are all required to comply with the legislation. Non-compliant or unfair terms may be unenforceable, so you may have to refund customers unexpectedly and incur costs in doing so. You have more freedom to contract when you deal with other businesses, but you still need to protect your business properly.
In order to ensure that the terms cover all your requirements, they should reflect the user’s journey. The user journey is an indication of what the user will go through/can do when using your website. Some examples include:
a) If users need to create an account, what are the requirements for this?
b) What happens when a user wants to terminate their account, or you want to suspend or terminate a user’s account?
c) If users can upload content, what are the rules around uploading content, and for downloading it later?
While you may know your processes and conditions for use of your website, by not reflecting a user’s journey, your terms are likely to have gaps which may leave you unable to properly conduct your business e.g. if you were to suspend a user’s account due to improper use but your right to do so has not been explained to the user, the user may claim you have unfairly suspended their account and ask for a refund, for example.
We can assist you to brainstorm the potential issues that may arise and assess the consequences depending on the types of users to ensure that your terms of use are clear and fair from a legal standpoint.
As your business grows and evolves, your requirements are also likely to change, for example: you may require a more stringent process for users to sign up or the goods or services you are selling have changed therefore certain processes no longer apply. There may also be updates to the law affecting your business which you may need to cover in your terms.
Do your terms of use correctly reflect your business and processes?
If your terms could use a once over in case they are out of date or incorrect or if you need to put in place terms of use, please get in touch with our Commercial team or contact us via contact@waterfront.law.
If your business involves sending personal data outside the UK and EEA, you may be aware of the need for a transfer risk assessment (TRA) to demonstrate that you have properly considered and mitigated any associated risks.
When it comes to commercial negotiations, they often don’t turn out the way you had hoped and then there is no going back. Instead of struggling on your own, losing a lot of management time and still not being sure you have got the best deal, let us negotiate for you.
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