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Terms of use white paper

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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.

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Terms of use white paper

  1. 1. TERMS OF USE A Terms of Use agreement or Terms and Conditions,as it is sometimes called, is an important part of ane-commerce website. A Terms of Use agreement isimportant for limiting the potential liability ofwebsite owners and operators, protectingintellectual property rights, and establishing othercontractual terms or policies relating to the useof the site. A Terms of Use agreement can alsoserve as an important marketing tool by setting thetone and providing information about the substanceof the website.The basic objective of a Terms of Use agreement isto form a binding contract with the user thatlicenses access to the website and use ofintellectual property found there, as well as limitthe website owner’s liability. Enforceability of aTerms of Use agreement is based on the theory thata contract is formed between the party offering thewebsite and the user of the website. However, theenforceability of this contract depends largely onhow the Terms of Use agreement presented to thewebsite user.Terms of Use agreements should be specificallycatered to each individual e-commerce business. Thetypes of goods or services offered, the perceivedaudience of the business, and the type of businessare all factors that can largely affect thecontents of a Terms of Use agreement. Forexample, websites that collect personalinformation from children do not want to run afoulof the Children’s Online Privacy Protection Act.Websites in heavily regulated industries – such assecurities or insurance brokers – may need torequire visitors to print and manually sign certaindocuments. Other Terms of Use agreements maywish to address unsolicited idea submissions orsimply reflect the particular business objectivesof the site.
  2. 2. Typically, a Terms of Use agreement should alsoinclude common provisions found in mostcontracts, including: (1) the governing law andjurisdiction for disputes; (2) integration or mergerclause; (3) survival language; and (4) the effectivedate of the agreement.E-commerce businesses should regularly revise theTerms of Use agreement to reflect changes on theirwebsite. However, revisions require someacknowledgement from the users that they havebeen alerted or otherwise been made aware of thechanges and updates to the Terms of Use.

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