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A service agreement's terms and conditions are an important component that ensures the parties involved understand their rights and responsibilities. They also provide context around the intent and purpose of a transaction.
As a business, you have legal responsibilities to a website or app user. As the provider, you must explain their rights and obligations when entering a contractual relationship with your company.
All business that have terms and conditions can benefit from a terms and conditions review, but this review is especially important for SaaS companies and technology businesses. For those companies, the terms and conditions review is a vital part of their risk management strategy.
Here is an article that defines terms of service.
You can review your terms and conditions in several steps.
The best way to review your terms and conditions is to ensure that all the necessary components are present. If you are missing any elements, or if they are not reflective of current regulations or policies, they should be your top priority.
You should also seek intellectual property protection to ensure your business’s IP is secure under your terms and conditions. If you have anything copyrighted, ensure it is protected under the Digital Millennium Copyright Act Notice and policy.
Privacy policies are an integral part of digital business, and you should review your privacy policy regularly to minimize risks. In addition, as rules surrounding data collection continue to change, companies are at a more outstanding obligation to revise their privacy policies regularly.
For example, the California Consumer Privacy Act requires all businesses in CA to update their privacy policies at least once every 12 months.
Is the language in your terms of service agreement easy to understand? Avoid any ambiguous phrasing or overuse of legal jargon. Too many technical terms can make your policies unclear, resulting in confusion or unnecessary lawsuits from users.
Most importantly, using approachable language helps build trust with your consumers. Your terms and conditions are there to protect them as well.
Make sure that your terms and conditions have clauses like indemnification and termination. Indemnity clauses define who pays for losses or damages and, in some cases, legal fees in the event of a lawsuit.
Termination clauses set the framework for ending user agreements or subscriptions without legal penalties. This can also reserve the company’s right to terminate a user’s agreement or revoke their user license under certain circumstances.
Blank spaces in a contract template or drafted contract can potentially render it legally void, if critical information is left out. Therefore, ensure that your terms and conditions agreement has no blank spaces left to be filled.
A large amount of white space in legal documents can impose the risk of modification after agreement or signatures; any blank spaces make a contract incomplete, so you should carefully check the structure of your terms and conditions before you publish it.
Here is an article with ContractsCounsel’s 2022 contract review checklist that will help you quickly review your terms and conditions agreement.
When reviewing terms and conditions agreements, you should check that all the contents are legally compliant with federal, state, and industry regulations.
Your contract should also establish a governing law, which describes the state’s laws governing the document’s terms and conditions.
Another important detail to look for provisions for future changes. Reserve a portion of the agreement to reserve your right to make changes to the agreement, describe how you will notify users of any changes, and identify the time period you will provide before the changes are incorporated.
Here is an article about how to write a terms and conditions agreement on your own. This post is also helpful when reviewing your existing document to ensure you’ve covered all the necessary elements.
Every business should review its terms and conditions agreement each year and other important documents related to its users. A terms and conditions review should happen annually, though some companies may review theirs every 6 months or quarterly.
It is important to ensure that your terms and conditions review protects your company as much as your users. Ultimately, the goal is to build a mutually beneficial and satisfactory contractual relationship for all parties.
Suppose you make changes to documents like your user license agreement or privacy policy. In that case, you should also review your terms of service/terms and conditions.
Here is an article about what your business should always look for in its terms and conditions review.