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What Is a Terms of Use Agreement?

Terms of use are the rules, specifications, and requirements for the use of a product or service. They serve as a contract between the product or service provider and user.

In addition to the definition above, a terms of use agreement:

• Limits the liabilities that fall on your company
• Establishes your property rights
• Outlines your dispute resolutions

You might also come across terms of use agreements with alternative titles, like:

• Terms and Conditions
• Terms of Service
• General Terms

Why You Need a Terms of Use for My Website or App

While terms of use policies aren’t required by law, it’s in your best interest to post one so you can maintain control over your website or app and pursue legal enforcement if users try to take advantage of your services.

You need a terms of use for your website or app to help:

• Limit website abuse
• Manage your liabilities
• Establish your property rights
• Minimize disputes
• Build trust with your customers

Let’s discuss these reasons for having a terms of use in more detail.

Terms of Use Help Limit Website Abuse

Your terms of use page may limit website abuse because it outlines and helps you enforce the rules you expect your customers to follow when accessing your services.

If someone does break your rules, you can point to your terms of use policy to streamline and simplify the response process.

Terms of Use Help Manage Your Liabilities

You can limit your liabilities in your terms of use policy, which helps protect your website or app from being held responsible if your users experience things like:

• Personal injury
• Loss of profits
• Warranty issues
• Computer issues
• Misrepresented products

By establishing your businesses’ liabilities, you can limit what users can and can’t sue you for, which may help you save thousands of dollars in legal fees.

Terms of Use Help Establish Your Property Rights

Your business likely has branding and content that you own and want to protect under copyright laws, including images, logos, videos, and page designs.

You can establish your intellectual property rights within your terms of use and explain to users how they can and cannot reuse, reproduce, or copy your materials.

Terms of Use Help Minimize Disputes

Part of your terms of use explains to users how your company handles and resolves conflicts. If a user is ever in contention with your terms of use, you can point to your dispute resolution clause to efficiently settle the issue.

Terms of Use Help Build Trust With Your Customers

A well-written terms of use policy helps set your customers’ expectations, which increases trust between you and your users.

People today expect to see a terms of use agreement on your website or app. If you don’t post one, you risk losing customers to competitors with more transparent legal policies.

You can easily create your own policy by downloading and using our free terms of use template for websites like yours.

Most Common Clauses in a Terms of Use Agreement

The specific clauses you’ll need to put in your terms of use agreement depend on the type of business you conduct.

That being said, below we go over the most common clauses found in terms of use policies.

Introduction

The introductory clause of your terms of use agreement sets the expectations for your users by defining what the agreement is for and who it covers.

In the sample terms of use introduction clause below from Walmart, they include a list of clearly defined terms they use throughout their policy.