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A Terms of Service, or TOS, is a set of rules that a user must agree to before they can engage in services or use a product.

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Terms Of Service: What Is It?

A Terms of Service, or TOS, is a set of rules that a user must agree to before they can engage in services or use a product. It can also serve as a disclaimer under certain conditions, such as for website use. A properly executed Terms of Service is legally binding for both parties.

A Terms of Service agreement usually has many different sections, such as definitions, user rights and responsibilities, and disclaimers. Terms of Service can change often, and they will need to be re-accepted as changes are made to the agreement.

It is important to any company or business to include as much information as possible in their Terms of Service to avoid problems in the future. Getting legal counsel for the Terms of Service can ensure no major points have been missed and that the Terms of Service is legally binding to users.


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What Are Terms of Service?

what are terms of service

Terms of service perform two essential functions. The first is to educate your customers on the rules of using your products and services. The second is to protect your company from lawsuits . The TOS is a simple enough document to draw up, whether you’re using a free terms of service generator or working from a sample. Terms of service should be one of the first documents issued to your clients, and you should be sure to get it read and signed by each client before proceeding with their business.

Part One - Language

A TOS starts off by familiarizing the reader with the terms that will be used throughout the document. Generally these terms are fairly, well, general ones, such as “Terms,” “Services,” “The Company,” etc.

Part Two – Rules of the Road.

The TOS then goes on to outline the rights and responsibilities of the user. The key to this section is to keep it short and sweet while including all relevant detail. The best approach is to tell your client what they can’t do rather than what they can do. Omission is more illustrative than inclusion. Plus, it’s a good idea to keep the TOS as short as possible so people actually them.

Part Three – What Is and Is Not Your Company’s Fault

Limit your liabilities. Limit them as much as you can, and make their limits clear. For example:

TO THE MAXIMUM EXTENT PERMITTED BY LAW, ARTHURMACARTHUR, INC. SHALL NOT BE LIABLE FOR AN YDIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR SPECIAL DAMAGES OR LOSSES, WHETHER TANGIBLE OR INTANGIBLE, RESULTING FROM AUTHORIZED OR UNAUTHORIZED USE OF OR ACCESS TO OUR PRODUCTS

You also might want to include a disclaimer or return policy, particularly if you’re in the retail business. This protects you from customers blaming you for damaged goods:

SUPERDUPER, INC. IS NOT RESPONSIBLE FOR THE CONDITIONS OF ITS MERCHANDISE. THE COMPANY SELLS ALL ITS MERCHANDISE ON AN “AS IS” BASIS AND ASSUMES NO LIABILITY OR RESPONSIBILITY FOR ANY DAMAGES INCURRED IN THE TRANSFER OR USE OF OUR PRODUCTS BY YOU OR ANY THIRD PARTY.

Part Four – Verification

Put a statement at the end like, “I have read and agreed to abide by PenDragonPencil’s Terms of Service.” If you’re issuing a paper TOS, follow this with a place for the user to print his or her name and sign and date the form provide instructions as to how the document should be returned to the company. If your TOS is online, you can just have the user insert his or her initials and hit the “I Agree” button.

The Main Components Of Terms of Service

main components of terms of service Terms of service (TOS for short) are, as the name suggests, a set of rules to which a user must agree before making use of a service. It is one of the most important legal documents to have in order before you open your business. Below I have listed the main components of terms of service, complete with explanations.

Definitions

Like many legal documents, the TOS derives a chunk of its formality from the use of “official terms.” The first sentence of a TOS should introduce the entities involved and define the terms by which they will be referred throughout. Usually, these are generic terms, like “Terms” and “Services.” For example:

The following Terms of Service (“Terms”) dictate permissible access and use of all services and products (“Services”) provided by Porcupine Products, Inc.

Description of allowable use

This section outlines the permissible ways in which the company’s services may be used. Detail is key, but keep it as short as possible (you want your users to actually read it). The best way to do this is to list which acts are not allowed, as opposed to all the actions that are. Here’s an example:

Disclaimer and Limitation of Liability

In this section, you outline your business’ liability for damages incurred by or to customers. Often these subjects are split into two sections. Here’s an example:

Disclaimer

The Products and all included content are provided on an "as is" basis without warranty of any kind, whether express or implied.

BOINK BOINK, INC. SPECIFICALLY DISCLAIMS ANY AND ALL WARRANTIES AND CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT, AND ANY WARRANTIES ARISING OUT OF COURSE OF DEALING OR USAGE OF TRADE.

Boink Boink, Inc. takes no responsibility and assumes no liability for any User Content that you or any other user or third party posts or transmits using our Products. You understand and agree that you may be exposed to User Content that is inaccurate, objectionable, inappropriate for children, or otherwise unsuited to your purpose.

Limitation of Liability

TO THE MAXIMUM EXTENT PERMITTED BY LAW, BOINK BOINK, INC. SHALL NOT BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, INDIRECT, PUNITIVE, INCIDENTAL, OR SPECIAL DAMAGES, LOSS OF PROFITS, DATA OR REVENUES, OR OTHER INTANGIBLE LOSSES, RESULTING FROM ANY OF THE FOLLOWING:

·         YOUR USE OF OUR PRODUCTS

·         YOUR INABILITY TO ACCESS OR USE ANY OF OUR PRODUCTS

·         UNAUTHORIZED ACCESS OR USE OF OUR PRODUCTS, INCLUDING UNAUTHORIZED ACCESS OR USE OF YOUR TRANSACTIONS, TRANSMISSIONS OR CONTENT

·         ACCESS OR USE OF OUR PRODUCTS BY ANY THIRD PARTY, INCLUDING OFFENSIVE, DEFAMATORY OR ILLEGAL ACTIONS

Signature

There must be a statement which the reader may authorize with his or her signature, verifying that he or she has read, understood and agreed to the Terms of Service. An electronic signature, or an affirmation that the reader agrees is sufficient.

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