1. TOU Should Define Permitted User Behavior
For any interactive website, it is important to define what users are allowed to do. If they can upload comments, photos, videos or music, you should reserve the right to delete that material or those comments, and terminate access to the service if users engage in any kind of infringing behavior. (This is also important for DMCA safe harbor purposes, see below.) The TOU can also include language prohibiting inflammatory, slanderous or libelous statements. Depending on your target audience and the amount of personal information your users will upload, you should also consider language prohibiting or limiting the use by those younger than 13 years old, so as to avoid violations of the Children’s Online Privacy Protection Act.
2. TOU Should Comply with DMCA Safe Harbor Provisions
The Digital Millennium Copyright Act (DMCA) contains a safe harbor provision for online service providers if they follow a few relatively straightforward steps. The online service provider must put in place a notice and takedown scheme in line with the DMCA regulations. A notice and takedown scheme allows someone who finds infringing material on a website to give notice to the service provider, who then is obligated to take it down. It also allows for counter-notice, if the person who uploaded the content wishes to challenge the legal status of the material. For someone writing a TOU for an online service provider, the most important thing is to clearly state that a notice and takedown scheme is in place, and designate and provide the contact information to an agent of the company who deal with such notices. Being DMCA compliant can insulate a service provider from claims for copyright infringement related to content posted by its users.
3. TOU Should Disclose Provider Behavior
4. TOU Should Carefully Lay Out Other Significant Terms
Any TOU needs to include legal terms that protect the service provider in the case of a dispute. These include warranty disclaimers, indemnification against use that violates the TOU, arbitration agreements, choice of law clauses, and clauses limiting damages. Although all of these can tilt quite heavily in favor of the service provider, when drafting a TOU you must be careful not to be so unfavorable to the users as to make the terms unconscionable and thus unenforceable. In one of the most famous cases of such unconscionability, a court struck down as unconscionable a provision that required arbitration in a venue convenient only to the provider.
5. You Should Reserve the Right to Change the TOU
*Thanks to Christoffer Stromstedt for his contribution to this article.