Since TwitPic’s recent controversy over its terms of service, which saw the company backtrack from an aggressive TOS that prevented its users from reselling photos they had uploaded to the service, a great deal of new attention has been focused on the contracts and agreements we sign every time we register with a new service.
It’s a fact of life that most of us don’t read our terms of service when we sign up for a new hosting account – a decision that can cost us dearly in the long run.
I can confidently say there is probably a great deal in your current terms of service that you don’t realize is there. If there is ever a legal dispute between you and your host, these could come back to haunt you; you might well have signed away more rights than you intended.
So what are some of the things buried in your TOS? Here are five things you’ll find in virtually any and all TOS’ and what they mean for you in the event of a legal dispute.
1. Your TOS is a Binding Contract
The first thing to remember about a TOS is that it is a binding contract. In the United States, the Electronic Signatures in Global and National Commerce Act (ESIGN Act) makes it so that you can sign contracts electronically with anything that indicates an intent to sign.
So, for example, when you tick the box to “agree to the terms of service” you are signing the contract the same as if your physical signature were on it.
If there were to be some dispute about the contents of the TOS, the onus would be on you to either show that the contract is not valid or that their demands were more than one could have reasonably accepted under the circumstances.
This, in a legal setting, is a very difficult case to make.
2. Your TOS is a Copyright License
When you create new works, either words, images, movies, audio, etc., you generally become the copyright holder in those works. Along with that comes a set of exclusive rights that only you, as the copyright holder, hold. Those rights include the right to reproduce a work, the right to publicly display/perform it and the right to prepare derivative works.
However, in order to be able to host your works and display them to visitors, your host either needs certain permissions from you or a license. As such, every TOS has a copyright license built into it, where you grant the host some limited rights to your work.
This is generally ok but some hosts can be overreaching, as with TwitPic’s case, and ask for far more rights than they actually need.
3. Your Host Makes No Guarantees (or Very Few)
The TOS (or related documents) is where your host spells out their obligations to you and their promises. Unfortunately, you’ll likely find that those promises are very few and far between.
Not only are uptime guarantees a myth, but your host also can not be held responsible for loss of business, data and other damages you may incur if their service fails.
In short, if the server explodes along with the backups and you lose everything on the site, your host owes you nothing more than, perhaps, the repayment of your contract.
4. You, However, Indemnify Your Host
But where your host protects themselves against all damages they may cause you, they also protect themselves against all damages you cause them.
Nearly all terms of service require that the user “indemnify” or compensate the host for any loses they may incur. This is especially true if you do anything that they deem to be outside of the terms of service.
If, for example, a script you run on your account causes physical damage to the server, you can be held accountable for the repairs. Likewise, if you somehow cause your host to be sued, you can be held liable for both the damages and legal expenses.
In truth, hosts rarely enforce this portion of their TOS but, if anything you did caused serious damage to them, you can rest assured that they would take action to seek compensation.
5. Your TOS Can Change, Often Without Warning
Finally. most terms of service have a clause that let the host, unilaterally, update the TOS. This means that the TOS you agree to today might not look anything like the one that’s in effect years from now.
Hosts need this ability because errors are often found in the TOS, a new service means that the host has to secure additional rights or a new law prompts the addition of more disclosures/disclaimers. However, this power can be abused easily.
Some hosts will have clauses in their TOS that requires them to notify you of changes and gives you a chance to opt out (usually by deleting your account within X number of days). Others, however, have no notice at all.
Obviously, it is best to be wary of hosts that provide no warning with TOS changes as there’s a real danger that things could change for the worst without you even knowing!
Considering how long most terms of service are and how many of them we have to agree to just to set up a site, there’s no surprise that most of them go almost completely unread. In fact, in TwitPic case, the “bad” TOS was online for nearly a week before anyone noticed and drew attention to it.
However, this particular case illustrated why it is important to be aware of what is in your TOS and to at least be able to quickly skim through them and pull out key points.
If you don’t, you may find yourself having signed a contract that gives away more rights than you intended and one that sets you up for serious legal headaches down the road.
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