A Terms of Use agreement or Terms and Conditions, as it is sometimes called, is an important part of an e-commerce website. A Terms of Use agreement is important for limiting the potential liability of website owners and operators, protecting intellectual property rights, and establishing other contractual terms or policies relating to the use of the site. A Terms of Use agreement can also serve as an important marketing tool by setting the tone and providing information about the substance of the website.

1. TERMS OF USE
A Terms of Use agreement or Terms and Conditions,
as it is sometimes called, is an important part of an
e-commerce website. A Terms of Use agreement is
important for limiting the potential liability of
website owners and operators, protecting
intellectual property rights, and establishing other
contractual terms or policies relating to the use
of the site. A Terms of Use agreement can also
serve as an important marketing tool by setting the
tone and providing information about the substance
of the website.
The basic objective of a Terms of Use agreement is
to form a binding contract with the user that
licenses access to the website and use of
intellectual property found there, as well as limit
the website owner’s liability. Enforceability of a
Terms of Use agreement is based on the theory that
a contract is formed between the party offering the
website and the user of the website. However, the
enforceability of this contract depends largely on
how the Terms of Use agreement presented to the
website user.
Terms of Use agreements should be specifically
catered to each individual e-commerce business. The
types of goods or services offered, the perceived
audience of the business, and the type of business
are all factors that can largely affect the
contents of a Terms of Use agreement. For
example, websites that collect personal
information from children do not want to run afoul
of the Children’s Online Privacy Protection Act.
Websites in heavily regulated industries – such as
securities or insurance brokers – may need to
require visitors to print and manually sign certain
documents. Other Terms of Use agreements may
wish to address unsolicited idea submissions or
simply reflect the particular business objectives
of the site.

2. Typically, a Terms of Use agreement should also
include common provisions found in most
contracts, including: (1) the governing law and
jurisdiction for disputes; (2) integration or merger
clause; (3) survival language; and (4) the effective
date of the agreement.
E-commerce businesses should regularly revise the
Terms of Use agreement to reflect changes on their
website. However, revisions require some
acknowledgement from the users that they have
been alerted or otherwise been made aware of the
changes and updates to the Terms of Use.