Flat Fee Arrangement
Website Terms of Use (also referred to as Terms of Service and Terms and Conditions) can often be
prepared for websites on a modest flat fee basis. The fee will vary based on the simplicity or complexity of the website. For instance,
a news website would probably have a relatively simple Terms of Use, whereas a social networking website would likely be more complex. Please
contact me at wgalkin@galkinlaw.com or by phone at 410 484 2500 to receive a quote for a flat fee to prepare Terms of Use for your
website.
Purpose and Approach
Terms of Use serve both as the agreement that defines the legal relationship between a website
and its users and a non-legal marketing document that sets the tone of the ongoing relationship that the website seeks to establish
with its users. Well prepared Terms of Use will achieve an effective balance between these often competing objectives.
It is
tempting for new websites to grab a Terms of Use document from a similar website and just modify it for their purposes. While this
might seem economical in the short run, it may be short sighted given the often modest fees that are charged to have Terms of Use
professionally prepared. See the flat fee note above. Once Terms of Use are prepared and uploaded, modifying them to address issues
that were initially either overlooked or misunderstood may not be a simple or inexpensive matter.
Just this past year, as reported
on www.publicknowledge.org, Twitter faced a problem when a user who was being harassed by another user wanted Twitter to take action
against the harassing user for violating Twitter’s terms of use. In that matter, a Twitter co-founder actually admitted that Twitter,
as a young start up, just borrowed Flickr’s terms of use, without considering them carefully, and would now have to revisit them.
Key Provisions
Following are some of the main issues that need to be considered when preparing Terms of Use.
- Establishing
Enforceability. It may seem obvious, but Terms of Use need to be enforceable against the users. Enforceability will often hinge on
how users express their assent to the Terms of Use. On one end of the spectrum, Terms of Use can just be posted on a website without
requiring users to take any action to accept them. This approach will be least enforceable. On the other end, a user could be compelled
to view and affirmatively accept the Terms of Use before being allowed to access the website. There are also various options in between.
Several factors need to be considered before selecting the right approach, including balancing liability risks with the impact on
the user experience. It is important to note that the method by which users are notified of modifications to Terms of Use will also
determine whether such modifications are binding upon the users.
- Rules Applicable to User Conduct. The Terms of Use need to define
acceptable and unacceptable behavior. For instance, the Terms of Use should (i) define proper and acceptable interaction with other
users, (ii) define the guidelines for content that users are permitted to upload, (iii) restrict users to personal use or also allow
commercial use, (iv) prohibit data harvesting or data mining, (v) prohibit unsolicited emailing or marketing, (vi) prohibit unauthorized
manipulation of the services, (vii) prohibit impersonation or fictitious profiles, etc.
- Rules Applicable to User-Generated Content.
When users can upload content to a website, the rights and ownership relating to such content must be defined. For instance, does
the website have ownership or at least license rights to comments and discussions, images, videos? License rights must be carefully
drafted, because rights not specifically granted will be deemed retained by the user. So if a website wants to be able allow video
or other content to be posted on other related sites or otherwise transferred, the website will need these rights expressly granted
by the users. Also, a website will want the right to remove for any or no reason any content that it deems in appropriate. Without
this express right, a website could face liability from a user. If the website wants to expand its use rights after initial Terms
of Use are uploaded, it may be difficult to have the expanded rights apply to user-generated content uploaded prior to the effective
date of the version containing the expanded rights.
- Preserve Ownership Rights in Content. Content can come from two sources: (i) website originated content and (ii) user-generated content.
The Terms of Use should establish the website ownership in content and limit how users are permitted to use that content.
- Provisions
Designed to Benefit Website from Statutory Immunities and Achieve Compliance with Legal Requirements. Certain provisions are required
to be in a Terms of Use to receive immunity for copyright infringement under the Digital Millennium Copyright Act. Similarly, Terms
of Use can include language providing that the users provide affirmative consent to receiving direct marketing materials from the
website or third parties. This will serve to avoid the opt-out provisions of the CAN-SPAM Act. Additionally, the law requires specific
procedures for collecting personal information from children under the age of 13 in accordance with the Children’s Online Privacy
Protection Act (COPPA).
- Provisions Designed to Position Website to initiate Enforcement Actions. It is important that a website
has broad discretion to terminate a user’s right to access the website when violating the Terms of Service or otherwise behaving in
a manner that might harm the website or other users. There are also various laws that a website will be better positioned to take
advantage of if certain provisions are contained in the Terms of Use. For instance, an express prohibition of sending unauthorized
emails to other users will improve the ability of the website to take immediate legal action for common law trespass and a violation
of the Computer Fraud and Abuse Act, and other laws that require a showing of unauthorized access. Additionally, establishing and
limiting rights to use copyrighted content will undercut an infringer’s defense that there is an implied license for liberal use of
the website content.
- Disclaimer of Warranties. Users may come to rely on the performance or services offered by a website. It
is therefore important that the Terms of Use clarify that the website makes no warranties as to performance, availability, quality,
correction of errors or accuracy of information. Enforceability of such a provision may depend upon the jurisdiction.
- Limitation
of Liability. A failure in performance might result in users incurring some kind of a loss or damage. Therefore, it is critical that
users agree that the website has only limited liability in terms of the types of damages and the total amount of damages incurred
by a user. Enforceability of such a provision may depend upon the jurisdiction.
- Choice of Law/Venue. If there is a dispute between
a user and a website, the website would want to be able to choose what laws apply and where any disputes will be conducted. Defending
an action in a distant location could put a significant financial burden on a website.
