Draft Terms Of Service

Terms of Service

Terms of Service (ToS) — also called Terms of Use or Terms and Conditions — is the contract between an operator and its users governing access to and use of a digital product. For B2C products especially, the ToS must navigate a patchwork of consumer-protection laws that override forum-selection and limitation clauses; drafting as if only one jurisdiction applies is a common and expensive mistake.

When to use this

• Launching a new website, app, SaaS platform, marketplace, or digital service
• Updating an existing ToS to address a new product feature, jurisdiction, or legal requirement
• Reviewing a third-party platform's ToS before integration
• Converting an informal "by using this site you agree" notice into a proper binding agreement

Required inputs

Document Structure

1. Introduction and Acceptance

Start with clear acceptance mechanics:

• "By accessing or using [Service], you agree to be bound by these Terms."
• State effective date
• Indicate how users accept: (a) click-through "I Accept" during signup — binding in all major jurisdictions; (b) continued use after notice of updated terms (for modifications)

2. Eligibility

• Minimum age requirement
• Geographic restrictions (if the service is not available in certain countries, state this — blocks "I didn't know" defenses)
• Capacity: users must have legal capacity to enter into contracts
• For B2B: user must be authorized to bind the organization they represent

3. Account Creation and Security

• Username/password obligations
• User responsibility for account security and all activity under the account
• Obligation to notify operator of unauthorized access
• Operator's right to suspend or terminate accounts for:
  • Violation of these Terms
  • Fraudulent or illegal conduct
  • Risk of harm to users, operator, or third parties
  • Regulatory requirement

4. Acceptable Use

Prohibited conduct:

• Any illegal, fraudulent, or harmful use
• Infringement of third-party IP
• Posting of prohibited content (define: hate speech, harassment, spam, malware, child exploitation material)
• Circumventing access controls or security features
• Commercial use of the service without authorization (for B2C products that prohibit API scraping)
• Reverse engineering, decompiling, or extracting source code (subject to applicable law limitations on this prohibition)

5. User Content

If the service allows users to post, upload, or submit content:

• License grant to operator: "By posting content, you grant [Operator] a worldwide, royalty-free, sub-licensable, perpetual [or: for the duration of your account] license to use, reproduce, modify, display, distribute, and publish your content for the purposes of operating and promoting the Service."
• Retention of ownership: "You retain ownership of your content subject to the above license."
• Representations: User warrants that: (a) they own or have the right to grant this license; (b) the content does not infringe any third party's rights; (c) the content does not violate these Terms
• Takedown: operator may remove content that violates these Terms or applicable law; see also [[draft-takedown-dmca]] for the DMCA counter-notice process

6. Intellectual Property

• Operator's IP: service, software, design, trademarks, and all other IP are owned by the operator (or its licensors); no license except to use the service as permitted by these Terms
• Feedback: if users submit feedback or suggestions, operator has a royalty-free license to use feedback without restriction (avoids a user claiming ownership of a feature idea)
• Restrictions: users may not: (a) sublicense access to the service; (b) use operator's trademarks without written permission; (c) remove copyright or proprietary notices

7. Payment and Subscriptions (if applicable)

• Pricing: current pricing available at [pricing page]; operator may change pricing with [30-day] notice
• Billing cycle: monthly/annual; payment by [accepted payment methods]
• Auto-renewal: subscriptions auto-renew unless cancelled before the renewal date; renewal notice must be sent in advance (specific requirements in EU, US states)
• Refunds: state the refund policy clearly; B2C platforms in EU have a 14-day withdrawal right for distance contracts that may apply to digital services depending on the service type and whether the user has consented to immediate performance
• Taxes: user is responsible for applicable taxes; operator adds VAT/GST where required by law
• Failed payments: service may be suspended on failed payment after [X] days

8. Disclaimers

• "AS IS" / "AS AVAILABLE": the service is provided without warranties, express or implied, to the maximum extent permitted by applicable law
• Disclaim: merchantability, fitness for a particular purpose, non-infringement, accuracy, completeness of information
• Note on consumer law: in EU and UK, implied terms in consumer contracts (satisfactory quality, fitness for purpose) cannot be fully disclaimed; the disclaimer applies only to the extent permitted by law — say this explicitly to avoid the entire disclaimer being void

9. Limitation of Liability

• Cap: operator's liability is limited to the greater of: (a) the amount the user paid in the 12 months preceding the claim, or (b) [USD 100 / EUR 100]
• Excluded losses: in no event is operator liable for: indirect, incidental, consequential, special, or punitive damages; loss of revenue, data, goodwill, or business; even if advised of the possibility of such damages
• Consumer law carve-out: nothing limits liability for death or personal injury caused by negligence, fraud, or any other liability that cannot be limited by law (EU / UK mandatory)
• Mutual limitation (for B2B): apply the same cap to user's liability to the operator

10. Indemnification (B2B or for breach-related claims in B2C)

User indemnifies operator against third-party claims arising from:

• User's violation of these Terms
• User's content (IP infringement, defamation)
• User's use of the service in violation of applicable law

For B2C: indemnification clauses are generally unenforceable in EU consumer contracts; limit to cases where the consumer has acted illegally or outside the scope of the ToS.

11. Termination

• By operator: with notice (30 days) or immediately for material breach
• By user: by closing account at any time
• Effect: surviving obligations (IP ownership, confidentiality, dispute resolution, limitation of liability, indemnification) continue after termination
• Data on termination: state clearly what happens to user data after termination; cross-reference Privacy Policy

12. Modification of Terms

• Operator may modify the ToS at any time with [30-day] advance notice (by email or in-app notification)
• Continued use after the effective date of modified terms constitutes acceptance
• For material changes, consider requiring active re-acceptance (click-through) rather than passive consent; some jurisdictions may require this for significant changes

13. Governing Law and Forum

State the governing law and the exclusive forum (court or arbitration) for disputes.

Key conflicts with consumer law:

14. Dispute Resolution

Option A — Courts (B2B or simple B2C): exclusive jurisdiction of [courts]; waiver of jury trial (US)

Option B — Arbitration (US B2C): disputes resolved by binding arbitration under [AAA Consumer Rules / JAMS]; individual claims only (no class arbitration); small claims court exception; 30-day opt-out right from arbitration clause for new users; operator pays arbitration fees above [X]; operator cannot require users to travel to a distant location for hearings

15. Contact

• Company name, address, email for legal notices
• Separate contact for DMCA/copyright: DMCA designated agent
• Separate contact for data privacy inquiries (link to Privacy Policy)

Jurisdiction-Specific Sections to Add

EU / UK — Consumer Rights

Add a section on statutory rights: "Nothing in these Terms affects your statutory rights as a consumer. If you are located in the EU or UK, you may have additional rights under local consumer protection laws."

EU — Right of Withdrawal

For certain digital content / services: "If you are a consumer in the EU, you have a 14-day right to withdraw from these Terms after conclusion of the contract, unless you have consented to immediate performance of the digital content / service and acknowledged that your right of withdrawal will be lost. By clicking 'Start using [Service]' you provide this consent and acknowledgment."

US — California Residents

Add a California-specific section: California Consumer Privacy Act rights; do-not-sell; Shine the Light Act (if applicable); specific arbitration language.

MENA — UAE

UAE Federal Law 4/2022 on Consumer Protection applies to all consumer-facing products offered in the UAE (whether operator is onshore or offshore to the extent they target UAE users). Key requirements: transparent pricing, no hidden charges, right to information in Arabic, specific protections for digital services.

Common Mistakes

• One ToS for all jurisdictions — EU consumers cannot waive statutory rights; a US-style ToS full of unenforceable provisions damages trust and may be struck down
• No auto-renewal disclosure — CCPA (US), EU e-Commerce Directive, and UK consumer regulations all require specific auto-renewal disclosures; courts and regulators take enforcement action
• UGC license perpetual without user benefit — "royalty-free, perpetual, irrevocable" license to all user content is standard but sometimes overbroad; consider a term-limited license (for the duration of the user's account plus [6 months]) for user-generated personal content
• Limitation of liability incompatible with EU consumer law — if you disclaim all consequential loss for consumer-facing digital services without a carve-out for statutory minimums, the entire limitation clause may be void in the EU
• Missing DMCA agent — for US-accessible platforms, designate a DMCA agent with the US Copyright Office

Related skills

• [[draft-privacy-policy]]
• [[draft-cookie-policy]]
• [[draft-saas-agreement]]
• [[review-tos-platform]]