Disclaimers & Terms of Use: Enforceable (Sometimes) & Important for Your Business

July 06, 2012

The proliferation of digital disclaimers and terms of service (TOS) in the internet era is a challenge to both consumers and businesses. Already strapped for resources to attend to the urgencies of the day, there’s little time, interest, or energy for reading pages of disclaimers, privacy policies, and terms of use.

Unfortunately, “I didn’t read the terms” is rarely an effective legal defense, and both consumers and businesses can suffer negative consequences for disregarding the terms and conditions of service. A few of the more common TOS mistakes that businesses make include:

1. No “check box” to confirm the user’s agreement to the TOS. This can render the terms and conditions entirely unenforceable. The case law regarding click-wrap agreements (a.k.a. click-through agreements) is still developing, so it’s a good idea to get advice from an internet law attorney to make sure that your terms and conditions are enforceable, and to ensure that the mechanics of user consent, communication, and content submission adhere to industry best practices.

2. Online contests and promotions that violate a website’s TOS. In addition to various state and federal laws that apply to contests and promotions, popular websites such as Facebook have additional terms and conditions that apply to contests. Violating the terms may expose you to a range of penalties and legal liabilities, in addition to suspension or forfeiture of your accounts.

3. Copying disclaimers, privacy policies, and terms of use from others. Depending on your product, service, or business strategy, your terms and conditions of use may be one of your most important assets. Taking shortcuts on the TOS will expose you to legal liabilities and may also impair your ability to expand or change the course of your product, service, or business strategy.

In the internet era, disclaimers, privacy policies and terms of use are important for every business. Integrating your business strategy with your TOS is an effective way to limit your risks and liabilities, while building value and security in the assets your business creates.

Disclaimer: This article is not legal advice and does not create an attorney client relationship. To reach the attorney responsible for this article please contact James Blake, The Blake Law Firm PLLC, 9442 N. Capital of Texas Hwy, Arboretum Plaza One Ste 500-181, Austin, Texas 78759. (512) 651-3930.

Topics: Featured, Business Best Practices, Legal

James Blake

The Blake Law Firm, PLLC.

James Blake is a growth-oriented business attorney who strives to be a creative business partner, to identify value-add opportunities, and to crystallize the relationships, structures, and processes that will drive your commercial success. James Blake practices law in Texas and Hawaii, and has protected the interests of businesses across a broad range of industries, including technology, construction, service and retail, food and beverage, franchisors and franchisees, product manufacturers, and investors. His work experience encompasses commercial transactions, litigation, and advising business operations in the U.S., Africa, and Asia. James was an editor of Law Review at the University of Hawaii and conducted international commercial law research for the Institute of Asian Pacific Business Law. He served as the Official Reporter for the 2008 IAPBL China Enterprise Bankruptcy Law Symposium held in Hong Kong, and in the same year worked at a large firm in Singapore. James currently advises clients in international business and investment issues in addition serving his client’s legal and business needs in Hawaii and Texas. Currently based in Austin, Texas, James is an avid writer and enjoys speaking at business-law seminars in addition to his legal practice. In his spare time, James enjoys sculling and kayaking on Ladybird Lake, outdoor photography, and supporting visual and performing arts.
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