Online Terms of Service (TOS) serve as the essential agreement between a business and its users, outlining the rules for accessing and using a website or mobile app. You’ll often see these referred to interchangeably as “Terms of Use,” “Terms and Conditions,” or “Terms of Sale”—the label doesn’t change their core purpose. For a quick overview of why every company should prioritize a strong TOS, check out our guide on the 5 Key Benefits of a Solid Online Terms of Service.
While drafting protective provisions in your TOS is a smart first step, proper protection comes from ensuring those terms hold up in court. Under U.S. law, certain missteps can render your TOS—or specific sections—invalid and unenforceable. Below, we outline four frequent traps to avoid:
1. Failing to Clearly Display the TOS to Users
If your TOS is buried behind obscure links or hard-to-spot buttons, courts may rule them unenforceable. Judges emphasize that users must be reasonably notified of the terms for them to bind anyone. The takeaway? Prioritize visibility: Place prominent, easy-to-access links to your TOS on key pages like the homepage, footer, or during signup. The more straightforward the presentation, the stronger your case that users were aware of the rules.
2. Skipping Affirmative User Consent
Like any contract, a TOS requires proof of mutual agreement. Simply posting the terms isn’t enough—users must actively indicate they’ve read and accepted them. To build a solid foundation, integrate clear statements on registration or login screens explaining that the TOS applies to all interactions. Then, require a simple checkbox or button click for users to confirm their consent before proceeding. This small step can make all the difference in demonstrating intent.
3. Including an Arbitration Clause Without an Opt-Out Option
Arbitration provisions are a popular way for companies to streamline dispute resolution outside of court. However, if your clause doesn’t allow users to reject it, a court might strike it down entirely. To stay compliant, build in a user-friendly opt-out mechanism—such as a 30-day window after signup or after you update the TOS with the clause. This flexibility not only respects user choice but can preserve the clause’s validity when challenged.
4. Updating TOS Without Proper User Notification
TOS aren’t set in stone; businesses often need to revise them as operations evolve. But significant changes demand more than a quiet update—they require clear communication to remain binding. Courts typically insist on proactive alerts, like targeted emails to users or pop-up notices on the next login. For broader reach, especially with non-registered visitors, consider placing a temporary banner on your homepage or login page that highlights the revisions and includes a direct link to the new version. Requiring fresh acknowledgment for logged-in users is ideal, but even a well-placed notice can suffice if implemented thoughtfully.
