Every Software as a Service (“SaaS”) business owner should be aware of the importance of the following regarding their Terms of Service (“ToS”).
First, and most importantly, you should require acceptance of your ToS before a customer ever sees your website or uses your services. Best practice is to have your ToS appear to everyone who enters your website in a pop-up box. This pop-up box, in order to be closed, should have two things: (1) A clickable, “I am over the age of 18,” box, and (2) a clickable, “I agree,” button. This will ensure that everyone who makes it to your website or uses your services is an adult and has agreed to your policies.
Second, you should describe your business in various ways in your ToS. You should provide your business’ legal name (and the d/b/a, if you are operating under one), so that your customer knows who they are doing business with. You should list the specific domain names your service operates on so that your customer is on notice, and because it is common in the industry for scammers to set up similar websites to take advantage of the unwary. Additionally, you should describe the activities your business engages in to fully inform customers of what your ToS apply to.
Third, include both your technical and legal requirements in your ToS. State what web browsers and operating systems your service fully functions on. Inform the customer that you have the right to monitor their activity while they are on your website or utilizing your services, to include terminating their access for any suspicious activities or illegal conduct. Also, state your intellectual property protections. For example, all proprietary rights belong to your business, including trademarks, logos, systems, copyrights, etc.
Finally, talk about the money. In your ToS include a section that either lists your pricing details or links to a separate page that lists them. In this section it is prudent to list the methods of payment your business accepts. You should also fully inform customers of how to cancel their services, and the monetary consequences of doing so. Lastly, you should include a return policy. It is common in the industry to state that returns are limited to monies paid. This allows you to limit potential damages against your business.
This is only a brief overview of some of the most pertinent items to include in your SaaS business’ ToS. A great (free) way to double check yourself is to view the ToS of a SaaS giant in the industry. As always, be aware of standardized forms, and never simply copy and paste someone else’s ToS. If you have questions over your ToS, it is highly recommended to consult an attorney to ensure they meet your unique business needs.
Written By: Connor McQuage
Disclaimer: This article is made available for educational purposes only, to give you general information and a general understanding of the law, not to provide specific legal advice. By using this article, you understand and acknowledge that no attorney-client relationship is formed between you and The South Texas Business Lawyers, nor should any such relationship be implied. This article should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
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