Updating Terms of Service

Technology and marketing law blogger Eric Goldman has some unequivocal advice about how not to amend your online terms of service:

"STOP PUTTING CLAUSES INTO YOUR CONTRACTS THAT SAY YOU CAN AMEND THE CONTRACT AT ANY TIME IN YOUR SOLE DISCRETION BY POSTING THE REVISED TERMS TO THE WEBSITE"

Eric's point is that caselaw keeps making clear that such clauses entail the risk that a court might throw out your entire terms of service, or "TOS."

So what's a developing web service to do? After all, you may not even know what your business model is until you've learned enough from your initial members or customers! In all events, it's not realistic to think that your terms of service won't change significantly, and often. 

Here are the kinds of behaviors Bob and I are seeing:

  • Having a long beta period. Some initially free services that know they intend to charge users down the road make it clear, beginning with their initial TOS and through subsequent iterations, that the service is in development and that substantial aspects of the service, including the TOS and community guidelines, will necessarily change along the way. This is a good practice because it serves an essential notice or expectation-setting function. Beware, however, the trap of thinking that, just because the customer or member is not being charged, she is not "paying" anything for the use of the service. She almost certainly is giving you something of value, feedback and/or content, either directly or indirectly. 
  • Emails to registered users. The mail can be supplemented with blog post(s) that summarize the changes to terms and perhaps some background on the rationale. This level of effort may be appropriate where the service is free but involves user generated content or other consideration from users. Twitter, for example, appears to make this kind of effort when updating TOS. 
  • Requiring consent to amended TOS at login. Web services that facilitate transactions will require users to confront, scroll through, and assent to the amended or new terms of service, before permitting the user to return. The best practice here will also usually include the capability of recording exactly when each user confirmed her acceptance of the amended or new terms of service. If the service is also subscription based, changes may best be coordinated with renewals or upgrades.

Online TOS are not like shrink wrap software licenses of old. They are going to need to move in step with the "releases" of the changing business. By the time you are generating revenue, changes to TOS can no more be an afterthought than can changes to contracts with your own vendors or suppliers.


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