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How do I make a “Terms and Conditions” user friendly while also protecting my legal rights?

Terms of Use. Terms of Service. Terms and Conditions. You’ve probably never paid much attention to them, despite them being on every website you visit online. The problem with Terms of Use (TOU) is that they are difficult to read and understand, and if you really want to use the site, you have to agree to them anyway.

But if you are the owner of the website, having the user bound by those terms and conditions is very important. How can you increase the odds that the user will be bound? One way is to try to draft them in simpler language. At the same time, it is important to make sure that legal rights are not lost in your effort to offer users a more readable TOU.

Simplify the language

The Atlantic published an article on this very topic and used website 500px as a prime example. The website offers its legalese in a column on the left and a simplification in a column on the right, with the disclaimer that the latter column “is not legally binding.” This arrangement, while superficially elegant, does nothing to address the problem that exists regardless of form—the user lacks comprehension, be it of the meaning of the rigid legalese or the legal implications that are lost when the terms are oversimplified. So overly simple language is not a solution by itself.

Legalese is notoriously convoluted and long-winded, with sentences that trail off out of sight and out of mind. The syntax and grammar of the TOU should be overhauled to be clear and more concise, using the grammar of modern English.

Visual clues to meaning

A visual overhaul of TOU to include clear headers and less densely-packed text can make them more appealing to read. The user experience is all about quickness and a good interface, and so far most TOU’s are only good at being overwhelming and ugly.

Clickwrap or Browsewrap?

At the end of the day—and at the bottom of the TOU—user engagement and acknowledgement is paramount.

Composing a good TOU is just half the battle, because a user still has to opt-in, be it through an active action or a passive one. A distinction can be made between “clickwrap” TOU that engage users through a positive action (requiring they “Accept” the terms or not) and “browsewrap” TOU, which exist as a hyperlink on the page a user is visiting and is not required to be viewed.

 

Whether or not either of these avenues is legally binding can depend on what country you are in.

In the U.S. Ninth Circuit case Nguyen v. Barnes & Noble, Inc. (2014), the user sued the bookstore for deceptive online business practices. The bookstore argued that the user could not sue because of an arbitration clause in the site’s terms. The court decided that  “the user was successful in arguing that they weren’t subject to the terms of use of a website that had a browsewrap agreement.”

However, in the Canadian case of Century 21 Canada Limited Partnership v. Rogers Communications Inc. (2011) (BCSC), browsewrap TOU were found to be enforceable against users. While it appears that non-prompting TaC may be legally binding in Canada, the very recent decision in Nguyen v. Barnes & Noble, Inc. and the otherwise complete lack of case law on this specific matter, especially in Canada, should suggest that it’s better to be safe than sorry—so be sure to clickwrap your shiny, new, and user-friendly TOU.

In the end, using simpler words, clear grammar, good organization and a clickwrap TOU can go a long way to engaging the user and increasing the chances that they will be bound by the terms and conditions presented.

To see a standard set of terms and conditions, visit our Small Business Law Library!

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Terms of Use Prohibitions on ‘Screen Scraping’ Are Enforceable Around the World

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This article is about a company who used an automated system to extract flight information from Ryanair’s website, and then charged consumers for booking through its site. Ryanair claimed that PR Aviation had acted in breach of its website terms and conditions. To gain access to the flight information, PR Aviation had to agree to Ryanair’s terms and conditions which prohibited the use of an automated system or software to extract data from the website for commercial purposes, unless Ryanair consented to the activity. Ryanair successfully sued a travel booking company that was using screen scraping technology to extract information from the Ryanair website.

Websites and internet service providers may wish to provide a very visible link to terms of use and prohibited uses on their website and include these in the registration process. It is also important that if the website owner is concerned that the person registering may be using illicit software (i.e. scraping) or not be who they are holding themselves out to be, that this be addressed in the registration process.

Read the article here.

Take away:

  • Website operators can prohibit ‘screen scraping’ of unprotected data via terms and conditions. The Court of Justice of the EU ruled that website operators can set contractual restrictions that prohibit other businesses from ‘scraping’ information. This judgment means that companies will have a much greater ability to restrict who uses the information about their products and services that are posted online.
  • To protect their intellectual property, it would be wise for website operators to implement a security feature which allows websites to track and identify whether queries are made by automatic programs.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Netflix Terms of Use Threatens to Terminate Accounts Using VPN

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This article is about Netflix Terms of Use Agreements. Netflix has decided to clamp down on those who use a VPN. A VPN is a virtual private network that many people use to avoid geographic restrictions for the content Netflix provides. Due to Netflix’s licensing content restrictions certain movies/tv shows are only allowed to be viewed from certain geographic areas. Netflix has updated their terms of use to deter people from using VPNs. This is addressed in Article 6C and 6H which state “You may view a movie or TV show through the Netflix service primarily within the country in which you have established your account and only in geographic locations where we offer our service and have licensed such movie or TV show. The content that may be available to watch will vary by geographic location. Netflix will use technologies to verify your geographic location. We may terminate or restrict your use of our service, without compensation or notice if you are, or if we suspect that you are (i) in violation of any of these Terms of Use or (ii) engaged in illegal or improper use of the service”.

Termination of service is often the only immediate recourse a website owner has for a breach of the Terms of Use.

Unfortunately, it also results in the long term loss of a customer.

Read the article here.

Take away:

  • Website owners have a choice between including automatic or discretionary termination of accounts for breach of the website Terms of Use.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Due Diligence is Required before developing software that operates with a social media platform

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Website Terms of Use for application program interfaces (“API’s”) for programs that are designed to work with that website often contain a representation that the developer owns the intellectual property (“IP”) connected with that API, and that the software does not infringe on the IP rights of third parties. This can often be a source for problems, even if challenges by third parties are not well-founded.This article cautions developers to conduct proper due diligence to ensure there is no infringement of third-party IP in their software, as violation of the Terms of Use could result in the inability to use the host website.

The article discusses three legal sources for third party challenges: trade-marks (branding of the software); copyrights (copying of code); and patents.

Read the article here.

Take away:

  • Due diligence before embarking on the development of software for use with a social media platform should include a consideration of all three sources of third party IP claims.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Service Fees Hidden in Website Contract

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Customers using fly.co.uk were extremely frustrated when they were charged a hidden fee after purchasing their plane tickets. The fees were hidden on an earlier page of the booking procedure. The customer said he thought he was booking a cheap flight with price-scraping website Fly.co.uk and was stunned when he saw the final bill.
He said he expected a total of £65.40 for two return flights between London and Stockholm, but after he clicked the ‘Complete booking’ button it amounted to £146.65 due to a service fee that wasn’t clearly listed. Websites should ensure that fees (especially substantial fees) are not hidden in a way that customers on websites will not be able to see them clearly. This includes fees hidden in long terms and conditions. Unfortunately, Fly.co.uk did not reimburse the customer.

Read the article here.

Take away:

  • Websites should ensure that fees (especially substantial fees) are not hidden in a way that customers on websites will not be able to see them clearly. In this case a man who purchased an airline ticket had his ticket price doubled with a hidden fee.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Are Unilateral Changes to Website Terms of Use Agreements Unconscionable?

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This article discusses the American case of MacKinnon v. IMVU, Inc., which challenged a website operator’s unilateral amendment of the website terms of use. In this case the customer had purchased audio products on the “instant messaging virtual universe” and had verified that they were full length. Almost a year and a half later, in accordance with the terms of use, the website operator limited all audio products to 20 seconds, with no refunds except for products purchased after a certain date. The court did not deal at length with the formation of contract issue, assuming that the clicks on the “I agree” buttons indicated an intention to form a contract.

The consumer alleged a breach of covenant of good faith and fair dealing, as well as unconscionability under California law. The court held that the issue of the conscionability of the ‘no-refund’ provision, which allowed IMVU to unilaterally alter or remove audio products, was a question of mixed fact and law, and not a question of law alone. This question could not be answered without considering the “commercial setting, purpose, and effect” of the clause.

Given the widespread use of similar types of unilateral amendment provisions in EULA’s, this case is certain to be followed closely.

The article notes that this case “suggests that unilateral amendments of website terms that impact users’ previous purchases without adequate compensation, may be suspect.”

Read the article here.

Take away:

  • Unilateral amendments to website user agreements may need to meet a conscionability test.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Keep the Fine Print Up to Date: The Website Terms and Conditions are Important

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This article recommends a number of provisions for website owners and internet service providers to consider when drafting their terms and conditions. The topics discussed include: information about the company; intellectual property; defamation; website content; liability; information about the user and its visits to the site; and transactions concluded through the site. The article advises website operators with social media content to be especially careful to include warranties and indemnities provisions in case a user infringes third party IP or defames someone on the website.

Read the article here.

Take away:

  • Website terms and conditions are extremely important, and should be updated with any change in product or service, and after any change in relevant legislation.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Developer Hacks Mobile App with Harmful Malware

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The developer of the app ‘Prized’ was caught using its users’ smartphones and other electronic devices to mine for cryptocurrency, which was damaging for the hardware, with the potential to leave it barely functional. The hardware owners also faced the possibility of increased electricity and data costs, as well as the time and expense of removing the malware. Consumers were promised that the app would allow them to earn points which would be redeemable for prizes and gift cards. In many instances, consumers did not receive the redeemable points that the app promised to deliver.

The Terms of Use of ‘Prized’ contained a provision that the apps “are and will be free of malware, spyware, time bombs, and viruses.” The opposite was true. The New Jersey Division of Consumer Affairs and the FTC combined to investigate complaints about the app. The developers entered into a settlement agreement with the two government agencies, requiring payment of legal and investigative costs, and obliging the developers to report annually for the next 20 years.

They will be required to file financial, personnel and other records annually to ensure compliance with the prohibition on “marketing or selling products that function as malware, and from using misrepresentations in the sale or advertisement of software products”.

Read the article here.

Take away:

  • Website operators should be careful not to breach the representations in their own Terms of Use.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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