App Terms and Conditions: 6 Key Clauses To Include in Yours
Having the correct terms and conditions is essential for publishing an app on any platform, but what does correct mean in this context? After all, an error in terms and conditions could lead to unnecessary legal issues you don't need.
Typically, there are two ways you can draft your T&Cs:
- Have a lawyer or professional with experience in contract law outline them
- Use a website that generates T&Cs as a service
A lawyer can give you specific experience and work with you one-on-one, but they are pretty expensive. A website won't give you the same individual service, but they can be very comprehensive and are often much less costly.
However, there are a few key clauses to include in any app's terms and conditions. Keeping these in mind is helpful for App owners, no matter who is writing the complete T&Cs.
This guide will examine six of the most critical areas of concern for companies and why they matter.
Clause #1: Acceptable Use
This clause defines how you intend for users to interact with your app and the general boundaries of those activities. It can give you coverage in case someone misuses your app.
For example, many companies include a clause stating that users must use the software following the rest of the terms and conditions. This clause helps cut out wiggle room that people could use to argue that the terms and conditions don't require users to follow them.
The precise form of this clause can vary based on what your app does. Apps that function as a flashlight will have a different expected usage scenario than banking apps. The goal here is to define, as clearly as possible, what a correct usage scenario looks like.
Software as a service (SaaS) can be a little different from regular apps. If you're planning to offer SaaS, check out our in-depth guide on agreements for those.
As part of defining proper usage, you should define prohibited uses for your app. This clause is an important section because it gives your company justification to terminate access and accounts if people misuse the software.
Common things to prohibit include activities like breaking the laws of a local jurisdiction, spamming content to other users, collecting data or other user information, editing the software without permission, and infringing on any person or company's copyright.
It's important to strike the right balance here. If you make your prohibition too broad, such as saying users cannot do anything that might negatively impact your company, the rule might not be enforceable in a court of law.
Talk to a qualified attorney to ensure you get suitably tight language here. Remember, some provisions are not enforceable, and how courts decide this often happens on a case-by-case basis.
Sections on acceptable usage usually have a specific area for terminating accounts. This clause helps clarify that you're reserving the right to ban people.
Try to keep a termination clause as broad as possible. If it's too narrow, you could find yourself in a situation where unexpected content or usage of your app doesn't legally allow you to terminate someone's access. In most cases, you can simply and clearly state that failure to comply with the terms and conditions gives you the right to terminate an account.
Clause #2: Content Ownership
Content ownership is a broad category that includes several major sub-sections.
Intellectual property covers the ideas that your company owns. These ideas include names, images, symbols, designs, art, and other creations of the human mind.
Generally, if something can be copyrighted, patented, trademarked, or held as a trade secret, it's probably intellectual property.
In simple terms, a clause on intellectual property helps prohibit other people from copying anything too closely and risking the future of your app.
In recent years, it's become more important to understand that intellectual property covers the human mind. For example, the US Copyright Office has recently held that AI-generated artwork is not eligible for copyright because it lacks an element of human authorship.
If you want to protect your intellectual property, you need to be sure you create it in a way that allows legal protection. Nothing in your terms and conditions will let you subvert any laws or regulations, so keep this in mind when defining your intellectual property.
Additionally, make sure to register all of your intellectual property. This process is crucial for trademarks and patents, but it's also highly recommended for creations that are eligible for copyright.
Many apps allow some form of user-generated content. This could be as simple as a username that other people can see but can also extend to things like writing posts or uploading photos to the app.
If you have this kind of content, there are two vital clauses to include.
First, define which rights each party involved has to the content. Does a user completely own their content, do they give the ownership to you, or is it somewhere in-between? You must specify who owns what to help forestall any legal issues.
Second, you should have a clause clearly stating that you have the right to remove content for any reason. The goal is to avoid giving users any wiggle room for contesting its removal. Otherwise, you could have to host content that you don't want on your app.
Your terms and conditions should also inform users about where the user-generated content is stored and displayed. This part is especially useful if you would like to be able to use the content for promotion or statistics.
Most companies allow users to retain ownership of their content but keep a right to use or remove user-generated content as necessary.
In cases like these, you also need to explain if and how you will credit them.
This section of your T&Cs can have far-reaching consequences, so it's important to understand how you want to write your terms. For example, if you claim ownership of everything, users uploading original artwork could lose their ownership of that work by using your app. They don't want that, so they won't use your app.
Clause #3: Payment Details
If you accept payments through your app, including through the app store, you should have a section that explains more about payment information.
Depending on your business model, you may need to cite factors like how users can pay, how you'll charge for subscriptions, which third parties you use to process payments, and anything else users should know about the process.
It is also a good idea to mention that you reserve the right to change prices and under which circumstances. Otherwise, users may be able to argue that you weren't transparent about important details regarding payment processes, and financial institutions may agree that's enough to void a transaction.
This clause should outline all additional fees that may come with making a payment, as well as the taxes that the user will be responsible for.
If you have recurring payments, your terms and conditions should specify how users can cancel their subscriptions.
Do not have any ambiguity in this clause. If a user claims that you've made it unreasonably difficult or impossible to cancel payments for a service they no longer want, you could get in big trouble.
Some apps allow for payments from multiple countries. If so, you may need to adjust the terminology in your terms and conditions to clarify that nothing in them is intended to go against local laws.
You can also add whether there will be a currency conversion; if there is, explain how it works.
App Store Requirements
App stores may require that you follow specific guidelines for payments. Make sure your payment details match the requirements of any store hosting your app.
This area is one of the main things that stores pay attention to when hosting your app, so they may deny your app until you start complying with their guidelines.
For example, Apple has a list of requirements for their apps, and their rules include that unlocking features and functionality must be done through in-app purchases. They won't let you use things like license keys or QR codes.
Many apps need some form of return policy or money-back guarantee. These policies could include any necessary disclaimers or warranties about the app and your products or services. Apps may also have a no-refund policy.
Either way, it's important to specify this in your terms and conditions. Doing so will not only help avoid potential legal issues related to payments but also show that you believe in what you are selling and value your customers.
Clause #4: Governing Law
The governing law clause allows you to define which laws should apply to your app if you fall under a legal dispute. Without it, people may be able to sue you in a jurisdiction that's significantly unfavorable to you.
Two of the most common jurisdictions that companies select are the area of the company's headquarters or the place where they do most of their business. This decision is vital for companies that offer their app worldwide.
Remember, selecting a jurisdiction for governing law does not mean local laws won't apply to your app. This provision is only as enforceable as you can make it.
If you have genuine concerns about local laws affecting your app, avoiding offering your service in that area may be better.
Clauses about governing laws usually include a line about how people outside of the governing jurisdiction may be entitled to the protection of mandatory consumer protection laws. This wording is careful and important.
By saying that people may be entitled, the app does not attempt to guarantee that the law will apply. If there's some uncertainty, this could help protect you. Similarly, by emphasizing that only mandatory laws apply, the terms help limit the scope of what might be relevant.
This is particularly important if you offer your app in areas with strong data privacy laws, like the European Union. Some areas enforce privacy laws quite strictly, and it's your job to comply with those laws if you offer software in those areas.
Clause #6: Updates
You may need to update your terms and conditions in the future. Ideally, this will be rare since the goal is to have a complete list of terms when you first launch your app.
However, situations like changing legislation or changes in features may require updating things. That's why your terms should have a section explaining how and where you will notify people of updates. Common methods include notifications both in-app and through any linked email address.
Don't forget to mention that accepting the updated terms and conditions will be necessary to keep using the app, even if people have already paid for it. However, this can get into some muddy legal waters, so you may need to keep supporting an older version of your app.
It's always recommended to seek legal advice on how updating your software may affect your legal responsibilities.
Writing the best terms and conditions for your app is important. The main purpose here is to create a document that's as favorable to you as possible while still being enforceable in court.
In sum, there are a few key things that you need to include on your T&Cs:
- Explain how processes like payments and content ownership work.
- Every one of these six clauses is crucial. Do not skip any of them.
- Consult with a lawyer or a trustworthy and experienced business to write your terms.
Many jurisdictions are getting stricter and throwing out agreements that are too unbalanced, so be thoughtful and careful when writing out your terms.