Without a doubt, every business organization requires a sort of skeletal structure by which the company operates. Without it, the business just operates at the whim of wherever the tumbleweeds go in the hopes that it may result in some sort of profitable venture or revenue stream. That’s not a good place to be. A business needs direction. That’s what the Terms of Service agreements are for.
I don’t care whether you’re the traditional brick-and-mortar establishment, or you’re based right in cyberspace. You absolutely need to have some documents contracting the exact interactions between these entities:
That’s your structure. It offers some protection legally as well. When you document all of those stipulated interactions with these entities, you, in essence, craft your very own terms of service.
That’s not the issue, obviously — the issue is what to put in those terms of service. They are important. But what’s the best way to go about them? Here are five tips you really need to keep in mind when drafting your own terms of service for your budding business.
Less Is More (or: Utter Simplicity and Linear Quality Represents More Literary Stability)
Look, I know we all like to sound thorough and intellectual, but please understand that while some of those legal documents we think about may have some pretty alien legalese about them, realize that standard legal documents outside of the courtroom don’t have to sound or read like that.
You don’t need the “de novo” or “amicus curae” or “habeas corpus” whatever lingo. Save that for the courts. To protect yourself legally, so you don’t ever have to walk inside those courtrooms, just be simple with your wording. The sacred rule is if you have to explain what you’ve written with additional writing, you’re probably getting just a bit too wordy.
The less business lawyers representing companies have to ‘explain’ things to the court, the more the courts, lawyers and other constituents will appreciate you. Think of the courts as the DMV: it’s an essential place to be, if you have to be there, but no one wants to wait in line for hours.
Short and Sweet. Avoid the “Long Winds”
Sure, we can be pretty simple with our language, but Hell will freeze over before we leave any stone unturned, hitting every point as clearly as possible. It’s understandable. We don’t want to miss anything, especially when dealing with the legal industry.
But you can, in fact, keep your document brief and succinct. Cover just enough about what you’re offering presently. Don’t go into hypotheticals, future endeavors and profits. Not only does it pack up the terms of service a bit too much, but what happens when those hypotheticals don’t actually happen? You’ll have yourself a legal issue you can’t rectify, because you’ve effectively wrote it down on paper.
Also be respectful of the rights of those users of your business. Remember that a copyright is a copyright when it comes to the literary field. When someone writes something, it’s still inherently theirs. You obviously can use it for a time given the fact that the individual in question specifically wrote it for you. But after some time, be sure to revert the rights of that content back to the original owner. It’ll protect you legally as well.
Break Down and Summarize Your Sections
You’re not writing a term or thesis paper. This isn’t college. This is the corporate world. Better yet, this is first and foremost the digital world, and in this atmosphere readability is especially key. So go the extra mile.
While your content may already be quite linear in style, summarize at the end of each section for those readers who want to scan to just get the initial “gist” of what you’re saying. Examples help, too, to illustrate just what you’ll provide to your respective parties. Just don’t go overboard and provide actual “pictures.” This may not be college, but it’s certainly not fifth grade.
You Better Not Be the Only One Reading These Terms of Service!
That sounds like a given, but you’d be surprised at the thought of taking it for granted that the terms of service read just fine to the business owner. It’s a common mistake. And we all make it. We immediately think that if it sounds right to us, it must sound right to everyone else.
That’s a big no-no. Get some beta readers. Have your internal team go over it with a fine-tooth comb to ensure that it does flow right at the reflection of other perspectives. Better yet, have your lawyer read it! You never know if the business contract attorney will catch some holes, contradictions or omissions in your wording, which could wreak havoc in a courtroom.
And even more importantly, let your users take a good look at it before it becomes legally effective. Get their thoughts. If they like it, great. If they’re confused, fix it.
Keep It Short, But Keep It Complete
Short and to the point is good, don’t get me wrong. It wasn’t listed as a tip for nothing. But you definitely shouldn’t keep it short at the expense of leaving out some of the essentials. This is a good tip, because many CEOs may not have a good idea of what components are necessary in a terms of service document. They are as listed:
- Ownership Rights
- Litigation Rights
- Non-Payment Consequences
- Termination of Service Rules
- Payment Terms
These are the stones you need to make sure you turn. Everything else is just moss and algae.
The Perfect Balance
In a way, getting a business going is about balance. Don’t rush it, but don’t drag. Watch your step, but don’t over-analyze. Be thoughtful about who you want to employ, but don’t take too long to hire. There are so many other paradigms and proverbs toward conducting a successful business.
For starters, though, if you can just get one document — the terms of service — out of the way, I’d say you’re well on your way to tackling the rest of it. And if you can do the terms of service with excellence, the rest should be a breeze.
- Photo provided by: smartphotostock.com
Matt Faustman is the co-founder and CEO at UpCounsel. You can follow him and get more startup tips at @UpCounsel.