What About that Fine Print?
Website "Terms of Use" and "Privacy Policy"
By: Maria Crimi Speth
Whether your business has always been internet based or your
traditional brick and mortar business has evolved to a click and
mortar business, you have a website. It's likely that you know that
you need the fine print - "terms of use" and a "privacy
policy." While you have many options when creating
these policies, these are the most common approaches:
- Let your web developer deal with it
- Copy and paste terms of use and a privacy policy from a similar
website
- Buy forms from a service
- Hire an attorney to draft terms of use and a privacy
policy
If you think that we have listed these in order of initial
expense, you are correct. However, as a long-term expense,
they are likely listed from most expensive to least
expensive. We recognize that our advice here is not unbiased,
but it is based on actual experiences of businesses that paid far
more legal fees than they wanted to because they elected to save
money up front.
What is the
purpose?
"Terms of use" is your contract with users of your
website. At a minimum, they should address the following:
- Rules that you expect your visitors to follow
- Requirements for submitting or posting content or orders on
your website
- Rules about comment posting, if your website permits
comments
- Membership information
- Jurisdiction over any disputes, and
- Provisions to protect you and your company from
claims
For example, if users post content on your website, how do you
know they have the rights to post that content? The user
might steal someone else's photograph, video, song, poem or story
and share it with the world by posting it on your
website. It is very important that you have a policy in
your "terms of use" that lets the true owner know how to reach you
if they request removal of that content. This policy may make
the difference between being liable for copyright infringement or
not.
Even if you don't permit users to post content or comments on
your website, "terms of use" are important. If you provide a
service or sell goods from your website, you could be subjecting
your company to a lawsuit in any state. Let's say you ship a
widget to Mississippi and the purchaser gets hurt because of a
defect in the widget. Or maybe your customer in Europe is
unhappy with your widget. Having a statement in your "terms
of use" that any disputes will be decided in Arizona courts can
make the difference in whether you end up in court in Arizona,
another state, or even another county.
A "privacy policy" may be even more important than "terms of
use". It is your disclosure to your website users about how
you are collecting and using their personal information. Some
states, such as California, require that you make this
disclosure. Their Online Privacy Protection Act requires all
operators of websites that collect "personally identifiable
information" to post a privacy policy on their websites.
Although your business may not be based or located in
California, unless you block all California users from
your website, it is highly likely to be visited by California
residents and therefore subject to "privacy policy"
requirements.
Why Have Your Own Privacy
Policy and Terms of Use?
While your web developer can supply your website with standard
terms of use or a standard privacy policy, they are drafting
contracts with your site users and it is unlikely that they will be
tailored to the needs of your business. More importantly,
your web developer may simply copy terms of use and a privacy
policy from another website.
If the privacy policy states that you do not share personally
identifiable information with anyone else, but your business model
includes a joint venture with another company with whom you share
your database, then you have violated your own privacy policy and
could be subject to a breach of contract or misrepresentation
claim. Similarly, you might use a privacy policy that states
that your website collects cookies (a piece of information about
the user) when your website does not collect cookies, which may
discourage some users from using your website.
The dangers and legal consequences of copying another website's
terms of use and privacy policy expand beyond the likelihood that
the terms will not fill your business needs. Terms of use and
privacy policies are copyright-protected documents. In other
words, it is illegal to copy them without
permission. If your agent - web developer, employee, or web
service - copies the policies, you are still legally responsible
for their acts.
We have actually seen this practice of "lifting" the fine print
from similar websites lead to big trouble for a website
owner. We wrote custom terms of use and a privacy policy for
one of our clients. Last year, our client learned that
another website had copied those terms and used them on their
website. That, coupled with the copying of other content, led
to a lawsuit and a large judgment in our client's
favor.
Like any other contract, your best bet is to tailor the terms of
use and privacy policy to your specific needs and consult with an
attorney experienced in internet law. After all, the purpose
of terms of use and a privacy policy is to limit your risk, not to
increase it. Jaburg Wilk recognizes the need to
keep legal costs low while still providing this valuable
service. That's why we offer reasonable flat fee rates on
these services.
About the author: Maria Speth
is a lawyer at Jaburg Wilk and also the Intellectual Property Law
Department Chair. She is a frequent speaker on intellectual
property law, internet law, trademark and tradename law and is the
author of the book, Protect Your Writings: A Legal Guide
for Authors. She can be reached at 602.248.1089 or mcs@jaburgwilk.com
3200 North Central Avenue
. Phoenix . Arizona