Website terms and conditions (also called terms of service or terms of use) are the contract between your business and the people who use your website or app. To be enforceable, users must have clear notice of the terms and must affirmatively agree to them, typically by clicking a button next to a conspicuous link. Well-drafted terms protect your intellectual property, set rules for acceptable use, limit your liability, and establish how disputes will be resolved, but courts will not enforce terms that users never meaningfully agreed to or that are unconscionable.
Startups often launch with terms copied from another site or a free template. Because your terms are a contract with every user, it is worth getting them right before you scale.
Making Your Terms Enforceable
The biggest legal risk is not what the terms say, but whether users actually agreed to them. Courts look at how the terms were presented:
- Clickwrap. Users must check a box or click “I agree” before proceeding. Courts generally enforce clickwrap agreements.
- Sign-in wrap. A notice near a sign-up or purchase button states that by clicking, the user agrees to the linked terms. In Berman v. Freedom Financial Network (2022), the Ninth Circuit held that such terms are enforceable only if the notice is reasonably conspicuous and the user takes an action that unambiguously shows assent.
- Browsewrap. Terms are available only through a link at the bottom of the page, with no affirmative act of agreement. In Nguyen v. Barnes & Noble (2014), the Ninth Circuit refused to enforce browsewrap terms against a user without actual or constructive notice.
Sound practices include placing a clear, contrasting link to the terms immediately next to the action button, using explicit language such as “By clicking Create Account, you agree to our Terms of Service,” keeping records of each user’s acceptance and the version accepted, and obtaining fresh consent for material changes.
Key Provisions in Website Terms and Conditions
Description of Service and Eligibility
Explain what the service is, who may use it (for example, minimum age or business users only), and any account registration requirements.
Acceptable Use
Set out prohibited conduct, such as unlawful activity, scraping, reverse engineering, security interference, harassment or misuse of AI features, and reserve the right to suspend or terminate accounts.
Intellectual Property and User Content
State that the company owns its software, content and trademarks, and grant users only a limited license. If users upload content, address who owns it and the license the company needs to host and display it. If you plan to use user content or data to train AI models, say so clearly and make sure it matches your privacy policy.
DMCA Procedures
Platforms that host user content can qualify for the Digital Millennium Copyright Act safe harbor by, among other things, adopting a notice-and-takedown process and a repeat infringer policy, and designating an agent with the U.S. Copyright Office. Agent designations must be renewed every three years.
Payments, Subscriptions and Cancellation
If you charge users, describe pricing, billing, refunds and cancellation. Subscription businesses must comply with California’s Automatic Renewal Law (Business and Professions Code §17600 and following), which requires clear disclosure of renewal terms, affirmative consent, an acknowledgment, and an easy way to cancel, including online cancellation for consumers who signed up online. California strengthened these requirements effective July 1, 2025. Federal rules on negative option marketing should also be considered.
Disclaimers and Limitation of Liability
Terms commonly disclaim implied warranties and cap the company’s liability, for example to the amount the user paid in a recent period. These provisions must be conspicuous, and some liabilities cannot be limited, such as certain liability for fraud, willful injury or violations of law. California consumer protection laws may also limit how far disclaimers can go with consumers.
Indemnification
An indemnity clause requires users to cover the company’s losses arising from their misuse of the service or violation of the terms. It is especially important for platforms that host user content.
Dispute Resolution
Many companies include arbitration agreements with class action waivers. These can be enforceable under the Federal Arbitration Act, but they must be drafted carefully. In California, a provision that waives a consumer’s right to seek public injunctive relief in any forum is unenforceable under McGill v. Citibank (2017). Companies should also consider the risk and cost of mass arbitration, where many individual claims are filed at once, and draft procedures to address it.
Governing Law, Changes and Termination
Specify the governing law and venue, explain how the terms may be updated and how users will be notified, and describe what happens on termination, including which provisions survive.
Questions to Answer Before Drafting
- What experience do users have, and how could they misuse the service?
- Do users post content, communicate with each other or transact with third parties?
- Do you charge fees or offer subscriptions or free trials?
- Do you serve consumers, businesses or both?
- Are there risks particular to your product, such as reliance on AI outputs, financial or health information?
- Where are your users located, and do any international laws apply?
Terms of Service vs. Privacy Policy
Terms of service are a contract governing use of the site. A privacy policy is a disclosure of how you collect, use and share personal information, required by laws such as the California Online Privacy Protection Act and, for covered businesses, the CCPA. The two documents should be consistent with each other and with your actual practices. See our article on California’s new privacy laws for current requirements.
The Takeaway
Website terms and conditions are a real contract with every user. Present them so users clearly agree, tailor them to how your business actually operates, and update them as your product and the law change. For more on online business compliance, see our article on legal aspects of e-commerce in California.
Frequently Asked Questions
Are website terms and conditions legally binding?
They can be, if users have clear notice of the terms and affirmatively agree to them, such as by clicking a button next to a conspicuous link. Terms posted only in a footer link without any act of agreement often are not enforced.
What is the difference between clickwrap and browsewrap?
Clickwrap requires users to click or check a box to accept the terms and is generally enforced. Browsewrap simply posts the terms through a link with no affirmative agreement and is often unenforceable.
Can I include an arbitration clause in my website terms?
Yes, arbitration agreements and class action waivers can be enforceable, but they must be clearly presented and carefully drafted. In California, a clause cannot waive a consumer’s right to seek public injunctive relief in every forum.
Do I need both terms of service and a privacy policy?
Most businesses should have both. Terms of service are the contract governing use of the site, while a privacy policy discloses data practices and is required by California law for many websites that collect personal information.
How Sutter Law Can Help
Sutter Law drafts and reviews website terms, subscription terms and privacy documents as part of our contract negotiation and privacy compliance practices; our contract review article explains what to look for. Contact us for a free consultation.
This article is general information, not legal advice. Reading it does not create an attorney-client relationship.
