The Pros (and Cons) of Keeping Terms of Service Language Broad

If a company operates a service, it’s a good idea to establish rules for how users will interact with it. Having a Terms of Service (TOS), a document that every user sees and must agree to when registering for an account (free or paid), is an effective way to protect a company and service. While TOS are legally binding, some websites use them to communicate disclaimers and insulate themselves from liability. Most importantly, they can serve as a failsafe, giving service providers tools and processes for reforming (or, if necessary, removing) bad actors.

Terms of service should give consumers a clear understanding of the arrangement they’ll have with the company. Usually this is pretty broad, but having terms around acceptable use or a code of conduct for user interaction, for example, can protect users from other users. However, users will never have a “right” to be on a privately-owned platform. Their participation and interaction with it is granted by the service provider.

Typically, a TOS will include broad language early on that sets the stage for situations that may trigger some form of remedy up to and including termination of a user’s account. For instance, Sony includes the following its PlayStation Network terms of service:

We reserve the right to deny the creation of any Account in our discretion. All information provided during Account registration must be truthful and accurate. We reserve the right to cancel any Account that uses, or that was created using untruthful or inaccurate information or that was created for a primary purpose that violates this agreement’s terms. Termination of your Account may result in the termination of associated or subordinated Accounts of your child family members and data or purchases associated with those Accounts.

While there is value in keeping a TOS broad, there are instances a service provider may wish to be more specific. Sony’s PlayStation Network TOS zeroes in on some offenses that may lead to punitive response. The document warns that users should abide by a “community code of conduct” and adhere to a number of rules when accessing the services. This list of 19 rules covers a lot of ground, including, “You may not abuse or harass others, including stalking behavior” and “You may not cheat, exploit or use any bugs, glitches, vulnerabilities or unintentional game mechanics in PSN services or any of its products or services to obtain an unfair advantage.”

The potential remedies, however, remain broad. This allows the company to evaluate each situation and take action that is specifically tailored to the incident. In the case of this first-party service provider, remedies include removal of offending communications, termination of accounts in violation, and temporary or permanent disabling of devices used to violate the terms of service.

There is some risk at leaving a TOS too broad, though. While flexibility gives companies latitude to make decisions on a case-by-case basis, some provisions require more narrow language. For instance, an over-broad waiver of class action or forced arbitration can lead to the court throwing out the entire TOS as unenforceable. Companies should be careful when asking customers to give up rights or waive protections like a jury trial.

Likewise, accuracy is crucial in TOS. Be mindful too that broad terms without specific definitions may lead to unintended consequences both in court and the court of public opinion. For this reason, we recommend that companies go through the process of creating their own TOS rather than copying one from another service provider. Every business has its own nuances, and language in a TOS that isn’t appropriate or custom to a company’s service may ultimately undermine the purpose for having the document in the first place.

For more on TOS and how it differs from End User License Agreements (EULA) and Service-Level Agreements (SLA), click here. If you need assistance establishing a TOS for your company, Odin Law and Media can assist. Contact us for more information.