Everyone who has ever used the internet to download a program or gain access to a service has had to read and agree to Terms of Service (TOS). In certain circumstances, they might be called an End User License Agreement (EULA). Both types of agreements accomplish roughly the same things: they outline the terms and conditions upon which a customer is permitted to utilize a good or service. Though often overlooked, they are integral cogs in the operation of a business and the delivery of products and services.
These types of agreements are binding contracts, just like any other. Specifically, they are called “adhesion contracts”. The difference between a regular contract and an adhesion contract is that in a regular contract, the customer is free to negotiate terms with the business entity. In an adhesion contract, the customer must agree to the terms outlined by the business entity, or else the customer will not have the privilege of utilizing the good or service at all. Another way to look at it is that typical contracts differ based on the interests of the parties negotiating their terms. An adhesion contract looks the same no matter whom the customer is.
Terms of Service are important tools for the successful business entity in that they make the customer operate by a defined set of rules that the business can dictate. Terms of Service also typically contain protections that the business entity doesn’t even know it needs: the so-called “fine print.” Fortunately, an experienced California business lawyer is an expert in drafting the fine print.
A business attorney may recommend a multitude of fine print provisions for your Terms of Service. For example, it may be advantageous for your company to dictate the choice of venue for the resolution of business disputes. This is an important provision because it forces a litigious customer to bring a lawsuit on your home turf, subject to the local laws under which you operate and subject to a more sympathetic local jury pool. Similarly, your attorney may recommend some provisions regarding any disclaimers or warranties your company may want to make in regard to your products or services. Overzealous warranties may expose your company to litigation in the future, while certain disclaimers may violate the laws of your jurisdiction. Other typical provisions include privacy policies, intellectual property rights, licensing, and accepted and prohibited uses of the product or service.
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How to Avoid Business Contract Disputes with Customers
Buying a Business in Sacramento