5 Things Internet Start-Ups Need in Their Terms of Service Agreement

Last week I wrote a post about Intellectual Property Clauses in Social Networking Sites’ Terms of Service Agreements.  As I stated in the article, the Intellectual Property Clause is very important when intellectual property (copyrights and trademarks) is shared on the internet.  However, there are other clauses or provisions in a Terms of Service Agreement that are equally as important and adequately protect the Internet Company against certain types of liability.   Before an internet start-ups gets on the net, the company should include these 5 provisions in its Terms of Service Agreement.

1. Description of Service. Include a very detailed description of the services provided by the website.  This provision is important because users can get an understanding of the services and how they work before signing up.

2. Rules of Conduct. This provision prohibits defamatory, abusive, harassing, threatening, or an invasion of a right of privacy conduct.  It also can prohibit illegal activity and solicitation.  In addition, the provision should include consequences if a user of the site engages in this type of conduct.  Consequences can include blocking the user from the site and deleting the user’s account.

3. Disclaimers. These disclaimers should include information regarding whether the site is collecting personal information of the users; what the site does with the information collected (does the site sell the personal information to third-party service providers) and what type of software is used to collect the information.

4. An Indemnification or Limitation of Liability Provision. This clause requires a user to release the Internet Service Provider from any claims, damages, or cause of action (liability) that arise out of the user’s interaction with other members of the site.

5.  Governing Law. The governing law provision dictates which state’s laws will govern if there is a dispute between the user and the internet company.  Usually the law governing state is where the internet company is located. It also addresses whether the user agrees to automatic arbitration or mediation should a dispute arise between the user and internet company.

There are tons of other forms of Terms of Service Agreements on the internet.  However, I highly recommend hiring a new media attorney to properly draft your company’s Terms of Service Agreement.  Form agreements NEVER address the unique and specific needs of each internet company’s business and model.