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Does my website need a terms of use policy?

If you are planning to build a website for your small business, and if you are doing so for the first time, the good news is that there are free and low-cost platforms which make creating a website relatively easy to do. However, you may also wish to ensure that your prospective customers and/or website visitors are aware of certain key terms which govern their interaction with your website. Whether you are using your website as a purely marketing tool, receiving and processing purchase orders, or your website is, in itself, offering a service, it is always a good idea to consider implementing a Terms of Use Agreement and pushing related notices to the attention of your website visitors. 

What is a Terms of Use agreement?

A Terms of Use Agreement is essentially a contract between your business (the “site owner”), and those who are viewing your website, such as potential customers or clients (the “website visitor” or “visitor”). These are also known as ‘terms of service’ or ‘terms and conditions’ – but most have the same intention of governing the website visitor’s access to and use of the site.

It is becoming increasingly more common for websites to remain blocked to a visitor until and unless (i) the visitor either acknowledges that use of the website is subject to certain conditions which will bind the parties, or (ii) the visitor expressly scrolls through (and presumably reads) the terms and conditions themselves. In the former case, full use of the website may not become available until the visitor scrolls to the bottom or selects the “I agree” checkbox. Requiring the visitor to expressly accept the terms and conditions of use is commonly known as “click-wrap”, “click-through”, “browser-wrap” and “scroll-wrap” (although there is some debate regarding the subtle differences between these). 

How can a Terms of Use agreement protect my business?

Canadian courts have generally recognized that website terms and conditions, once accepted by the website visitor, create a contract between the visitor and the site owner. In such circumstances, the site owner would be the “offeror” and the website visitor the “offeree”. Most importantly, the underlying fact that such terms and conditions exist and will govern must be brought to the attention of the visitor in a clear and unambiguous way. This helps to explain why more and more businesses are relying on “click-wrap” rather than merely posting a “terms of use” hyperlink somewhere at the bottom of a website. 

Aside from the fact that setting out the four corners of the relationship that exist between a website visitor and site owner is generally a good idea, there are several specific key reasons to have a Terms of Use Agreement. A Terms of Use Agreement sets out exactly what your website should, and should not be used for, and it will also limit your business’ liability. For example, putting a website visitor on notice that the website they are about to interact with is contingent on their agreement with your site analysing and processing Cookies, or otherwise using and storing what may be considered their private information to improve their user experience, is fundamental to nipping a privacy claim in the bud. We also know that once a website is live, in may be accessed all over the world. Therefore, ensuring that your website is subject to the laws of your jurisdiction can ensure a site owner is not called on to defend itself in unfamiliar territory of the world. Other examples of limiting liability include disclaiming any legal responsibility for third-party or even direct breaches of copyright laws by users, indirect damages while a website may be down for maintenance and setting out a favourable method for dispute resolution. 

Can I just use the Terms of Use from another website?

Without a full understanding of how Terms of Use operate, it may be tempting to just lift terms from another website that you frequently visit. This would be a grave mistake.

Terms of Use may look boilerplate, but it is a legally enforceable agreement that should be tailored to the needs of your business and drafted in a manner that protects the site owner as much as possible. Borrowing language from another site, even if the site owner is in the same industry and concerned about the same issues, is not advisable; there may be terms and conditions in the borrowed Terms that not only make little sense in your context but could actually hurt you. For example, a different site owner’s Terms and Conditions might incorporate by reference other policies, such as a privacy policy, or a dispute resolution policy, that you would not choose for yourself. Such mistakes could be costly – possibly more so than what it may have cost to consult a lawyer!

What should be in a Terms of Use agreement?

As is becoming more common, it is good practice for the Terms of Use Agreement to be brought to the attention of the website visitor by the site owner before the website visitor can interact or use the website. Further, like other business contracts, the Terms of Use Agreement should clearly and unambiguously set out the following: 

  • Who is being governed by the Terms of Use Agreement;
  • Precisely what constitutes “acceptance” of the Terms of Use Agreement by the website visitor;
  • What are the consequences of non-compliance with the Terms of Use; 
  • How a website visitor can “opt out” or terminate the Agreement; and
  • Other common contractual language.

The above is by no means an exhaustive list. A site owner that operates in a heavily regulated industry may require unique terms and conditions to ensure that the Terms of Use Agreement is enforceable. Further, unlike in the business-to-business space, a retail business site owner may need to consider consumer protection legislation in the various jurisdictions in which it hopes to solicit sales. On a site such as ours, for example, we are clear that none of the information contained in this or any other blog is legal advice, and that proper advice can only be sought through direct communications with a lawyer.

Final Thoughts

As businesses continue to operate and compete as much in the digital space as they do from brick-and-mortar buildings, the need for sufficient legal protection online becomes more pronounced. Your legal risk reduction program should always include a review of liability associated with online marketing, e-commerce and user experience. 

We advise businesses throughout the Cambridge, Kitchener, and Waterloo region about how to best protect themselves online. Contact us today to set up a consultation.