Does Your Startup Need A ‘Terms Of Use’ Policy?

Does Your Startup Need A ‘Terms Of Use’ Policy?


Terms of Use is a document that defines the scope of a business including its services, liabilities, obligations and return & refund policies

A robust T&C on a website gives immense confidence to its users

T&C assists the company to deliver a consistently good level of customer service

“Why does a website need Terms of Use?” is a question that any startup operating a part of its business online often ponders upon. Any website or mobile application needs a detailed Terms of Use policy. This document is essentially what protects a business against legal claims made by users. 

Terms of Use is a document that defines the scope of a business including its services,  liabilities, obligations, return and refund policies. In the digital age when all sorts of businesses are going online, it’s important to protect the business against frivolous and malicious claims, fraudulent activities, and misuse of the platform.

Do Website Terms And Conditions Have Any Real Value? 

The answer to that question is yes. Any ‘platform’ by way of a website or a mobile application needs a Terms of Use policy. It is in fact extremely important and valuable for any entity that is running its business digitally, transacting online, and creating and sharing any type of content online.

A properly drafted Terms of Use defines all stakeholders including the platform, the users, customers, any service providers or vendors if relevant. In fact, the platform can go on to define who the platform is meant for, who are the people not eligible to use the platform and who are barred from using the platform. It is also recommended to include a method or preferred mode of communication in the Terms of Use so that the user knows how to get in touch with the right person at the entity to have their issues resolved. 

Since all platforms contain content, have design elements and use the company’s branding, there must also be a detailed clause dealing with intellectual property rights. It should clearly define how the content on the platform and the company’s logos and designs ought to be used by third parties. The platform retains the right and discretion to remove or block any user who it feels is violating its policies, any applicable laws, or acting inappropriately. A robust Terms of Use should also contain clauses limiting the liability of the entity, indemnify them appropriately and give them the right to terminate any services or associations as and when they so deem fit. 

Industry-Specific Policy

In the case of SaaS products, the Terms of Use can also be specific enough to define how the product is to be used appropriately, regulating its use so that a user does not disrupt its functioning, tries to introduce viruses or even reverse engineer it. 

In the case of ecommerce companies, the Terms of Use can contain information related to conditions of sale. It could set out the disclosures on methods of payment, shipping, delivery, withdrawals, and cancellation conditions. Additionally, it also features other clauses which are commonly required by consumer protection regulations. 

How Does It Protect The Users

It is important for users to understand that a website or a mobile app is the property of an organisation or an individual. So legally speaking, they have the right to govern the ways in which any individual or entity interacting with them, behaves in. A Terms of Use, along with a detailed privacy policy is a must for every website or mobile application, irrespective of their type or industry of business. Some businesses also need other policies such as Disclaimer Policies, Grievance Redressal Policies, Refund & Return Policies, Customer Care Policies.

It is essential that startups make it a standard practice to draft a Privacy Policy that is in accordance with the law. The proposed Personal Data Protection Bill, 2019 lays out the do’s and don’ts when it comes to protecting individuals’ personal data. To comply with the proposed law, startups must essentially adopt the ‘privacy by design’ approach. This means the very design of the system will have to be embedded with privacy to ensure its security. They will also need to create processes to handle requests from users wanting to exercise certain rights in relation to their data.

In fact, a robust T&C on a website gives immense confidence to a website’s users as well. It ensures that there are no surprises arising out of ambiguity in a company’s service deliverance. Having an agreed set of terms helps the website manage its client’s expectations with regard to delivery and payment. It also ensures that the company doesn’t end up with disappointed clients where expectations haven’t been met. Further, the T&C assists the company to deliver a consistently good level of customer service.

Note: The views and opinions expressed are solely those of the author and does not necessarily reflect the views held by Inc42, its creators or employees. Inc42 is not responsible for the accuracy of any of the information supplied by guest bloggers.

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