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Terms of Service, also known as Terms of Use and Terms and Conditions,[note 1] are the legal agreements between service providers and the service consumers. The person must agree to abide by the terms of service in order to use the offered service. Terms of service can also be merely a disclaimer, especially regarding the use of websites. Vague language and lengthy sentences used in these terms of service have caused concerns about customer privacy and raised public awareness in many ways.

A Terms of Service agreement is mainly used for legal purposes by companies which provide software or services, such as web browsers, e-commerce, web search engines, social media, and transport services.

A legitimate Terms of Service agreement is legally binding and may be subject to change.[1] Companies can enforce the terms by refusing service. Customers can enforce by filing a lawsuit or arbitration case if they can show they were actually harmed by a breach of the terms. There is a heightened risk of data going astray during corporate changes, including mergers, divestitures, buyouts, downsizing, etc., when data can be transferred improperly.[2]

Content

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A terms of service agreement typically contains sections pertaining to one or more of the following topics:

  • Disambiguation/definition of keywords and phrases
  • User rights and responsibilities
    • Proper or expected usage; definition of misuse
    • Accountability for online actions, behavior, and conduct
    • Privacy policy outlining the use of personal data
    • Payment details such as membership or subscription fees, etc.
    • Opt-out policy describing procedure for account termination, if available
    • Sometimes contains an Arbitration clause detailing the dispute resolution process and limited rights to take a claim to court
  • Disclaimer/Limitation of liability, clarifying the site's legal liability for damages incurred by users
  • User notification upon modification of terms, if offered

Among 102 companies marketing genetic testing to consumers in 2014 for health purposes, 71 had publicly available terms and conditions:[3]

  • 57 of the 71 had disclaimer clauses (including 10 disclaiming liability for injury caused by their own negligence)
  • 51 let the company change terms (including 17 without notice)
  • 34 allow data disclosure in certain circumstances
  • 31 require consumers to indemnify the company
  • 20 promise not to sell data

Among 260 mass market consumer software license agreements in 2010:[4]

  • 91% disclaimed warranties of merchantability or fitness for purpose or said it was "As is"
  • 92% disclaimed consequential, incidental, special or foreseeable damages
  • 69% did not warrant the software was free of defects or would work as described in the manual
  • 55% capped damages at the purchase price or less
  • 36% said they were not warranting whether it infringed others' intellectual property rights
  • 32% required arbitration or a specific court
  • 17% required the customer to pay legal bills of the maker (indemnification), but not vice versa

Among the terms and conditions of 31 cloud-computing services in January-July 2010, operating in England:[5]

  • 27 specified the law to be used (a US state or other country)
  • most specify that consumers can claim against the company only in a particular city in that jurisdiction, though often the company can claim against the consumer anywhere
  • some require claims to be brought within half a year to 2 years
  • 7 impose arbitration, all forbid illegal and objectionable conduct by the consumer
  • 13 can amend terms just by posting changes on their own website
  • a majority disclaim responsibility for confidentiality or backups
  • most promise to preserve data only briefly after terminating service
  • few promise to delete data thoroughly when the customer leaves
  • some monitor the customers' data to enforce their policies on use
  • all disclaim warranties and almost all disclaim liability
  • 24 require the customer to indemnify them, a few indemnify the customer
  • a few give credits for poor service, 15 promise "best efforts" and can suspend or stop at any time

The researchers note that rules on location and time limits may be unenforceable for consumers in many jurisdictions with consumer protections, that acceptable use policies are rarely enforced, that quick deletion is dangerous if a court later rules the termination wrongful, that local laws often require warranties (and UK forced Apple to say so).

Readability

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Among the 500 most-visited websites which use sign-in-wrap agreements in September 2018:[6]

  • 70% of agreements had average sentence lengths over 25 words, (where 25 or less is needed for consumer readability)
  • median FRE (Flesch Reading Ease) score was 34 (where over 60 is considered readable by consumers)
  • median F-K (Flesch-Kincaid) score was 15 years of school (498 of 500 had scores higher than the recommended 8th grade)

Among 260 mass market consumer software license agreements which existed in both 2003 and 2010:[4]

  • median and mean Flesch scores were 33 in both years, with a range from 14 to 64 in 2003, and from 15 to 55 in 2010 (where over 60 is considered readable by consumers)
  • median number of words rose from 1,152 to 1,354, with range of 33 to 8,406 in 2003, and from 106 to 13,416 in 2010

Public awareness

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A 2013 documentary called Terms and Conditions May Apply publicized issues in terms of services. It was reviewed by 54 professional critics[7][unreliable source?] and won for Best Feature Documentary at the Newport Beach Film Festival 2013 and for Best Documentary at the Sonoma Valley Film Festival 2013.[8][unreliable source?]

Clickwrapped.com rates 15 companies on their policies and practices with respect to using users' data, disclosing users' data, amending the terms, closing users' accounts, requiring arbitration, fining users, and clarity.

Terms of Service; Didn't Read is a group effort that rates 67 companies' terms of service and privacy policies, though its site says the ratings are "outdated."[9] It also has browser add-ons that deliver the ratings while at the website of a rated company. Members of the group score each clause in each terms of service document, but "the same clause can have different scores depending on the context of the services it applies to."[10] The Services tab lists companies in no apparent order, with brief notes about significant clauses from each company. In particular, competitors are not listed together so that users can compare them. A link gives longer notes. It does not typically link to the exact wording from the company. The Topics tab lists topics (like "Personal Data" or "Guarantee"), with brief notes from some companies about aspects of the topic.

TOSBack.org, supported by the Electronic Frontier Foundation, lists changes in terms and policies sequentially, 10 per page, for 160 pages, or nearly 1,600 changes, for "many online services."[11] There does not seem to be a way to find all changes for a particular company, or even which companies were tracked in any time period. It links to Terms of Service; Didn't Read, though that typically does not have any evaluation of the most recent changes listed at TOSBack.org.

Terms of services are subject to change and vary from service to service, so several initiatives exist to increase public awareness by clarifying such differences in terms, including:

  • Availability of previous terms
  • Cancellation or termination of the account and/or service by user
  • Copyright licensing on user content
  • Data tracking policy and opt-out availability
  • Indemnification or compensation for claims against account or content
  • Notification and feedback prior to changes in terms
  • Notification of government or third-party requests for personal data
  • Notification prior to information transfer in event of merger or acquisition
  • Pseudonym allowance
  • Readability
  • Saved or temporary first and third-party cookies
  • Transparency of security practices
  • Transparency on government or law enforcement requests for content removal

Criticism and lawsuits

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AOL

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In 1994, the Washington Times reported that America Online (AOL) was selling detailed personal information about its subscribers to direct marketers, without notifying or asking its subscribers. That article led to the revision of AOL's terms of service three years later.

On July 1, 1997, AOL posted their revised terms of service to take effect July 31, 1997, without formally notifying its users of the changes made, most notably a new policy which would grant third-party business partners, including a marketing firm, access to its members' telephone numbers. Several days before the changes were to take effect, an AOL member informed the media of the changes and the following news coverage incited a large influx of internet traffic on the AOL page which enabled users to opt out of having their names and numbers on marketing lists.[12]

Sony

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In 2011, George Hotz and other members of failOverflow were sued by Sony Corporation. Sony claimed that Hotz and others had committed breach of contract by violating the terms of service of the PlayStation Network and the Digital Millennium Copyright Act.[13]

Instagram

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See also: Instagram § Criticism and lawsuits

On December 17, 2012, Instagram and Facebook announced a change to their terms of use that caused a widespread outcry from its user base. The controversial clause stated: "you agree that a business or other entity may pay us to display your username, likeness, photos (along with any associated metadata), and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you".

There was no apparent option to opt out of the changed terms of use.[14] The move garnered severe criticism from privacy advocates as well as consumers. After one day, Instagram apologized, saying that it would remove the controversial language from its terms of use.[15] Kevin Systrom, a co-founder of Instagram, responded to the controversy, stating:

Our intention in updating the terms was to communicate that we'd like to experiment with innovative advertising that feels appropriate on Instagram. Instead, it was interpreted by many that we were going to sell your photos to others without any compensation. This is not true and it is our mistake that this language is confusing. To be clear: it is not our intention to sell your photos. We are working on updated language in the terms to make sure this is clear.[16]

Zappos

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Some terms of services are worded to allow unilateral amendment, where one party can change the agreement at any time without the other party's consent. A 2012 court case In re Zappos.com, Inc., Customer Data Security Breach Litigation held that Zappos.com's terms of use, with one such clause, was unenforceable.[17]

The Walt Disney Company

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On October 5, 2023, a 42-year-old woman named Kanokporn Tangsuan (who worked as a doctor at NYU Langone Health) was killed at Raglan Road Irish Pub at Disney Springs in Walt Disney World after going into anaphylactic shock due to increased levels of dairy and nuts in her system. Her widower, Jeffery Piccolo, filed a wrongful death lawsuit against Disney in February 2024, claiming that she had alerted staff to her severe allergy to both multiple times, but was ignored.[18] On May 31, Disney filed a motion to get the lawsuit dismissed, citing the terms of service of both the My Disney Experience app (which they booked tickets from) and Disney+ (which they had used a free trial of in the past). This term would require all legal disputes against Disney and its affiliates to be held in an individual binding arbitration.[19] The story's publicization in August 2024 prompted severe backlash against the Walt Disney Company, with many moving to cancel their subscriptions to Disney+ and for a boycott of other Disney products and services. Piccolo's legal team also argued against Disney's claims, first stating that the terms of service on both platforms were "effectively invisible", and that Piccolo "would have had no notice" of the conditions. They also argued that Piccolo's use of these services should have no effect on Tangsaun's right to be represented in this case.[19][20] Disney responded by claiming to be "deeply sorry" of the death, and that they were only defending themselves against a lawsuit towards the entire corporation.[21] The motion for the dismissal of the case was later withdrawn by Disney on August 20, 2024.[22]

See also

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Notes

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References

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Revisions and contributorsEdit on WikipediaRead on Wikipedia

Terms of service

View on Grokipedia
from Grokipedia
Terms of service, also known as terms of use or terms and conditions, are legally binding contracts between a and its users that specify the rules, , and obligations governing access and utilization of the provided service. These agreements typically cover aspects such as permissible user conduct, protections, handling practices, payment requirements, and disclaimers of liability for the provider. In the context of online platforms, applications, and digital services, terms of service have proliferated since the expansion of the , often presented via "" mechanisms that demand explicit user assent—such as checking a box or clicking "I agree"—to proceed with registration or access. Courts assess their enforceability under standard contract law principles, requiring demonstrable notice of the terms and affirmative acceptance; passive "" formats, where links are merely hyperlinked without required interaction, are commonly invalidated for failing to prove user awareness or consent. Key defining features include provisions allowing providers to unilaterally amend terms, impose mandatory to limit litigation and class actions, and retain extensive rights over and data, which can extend to perpetual licenses for commercial exploitation. Such elements have sparked controversies over their perceived imbalance favoring providers, with empirical studies indicating that over 90% of users skip reading them due to length and complexity, yet providers rely on the of to enforce restrictive clauses like non-compete restrictions or content removal powers. Despite occasional judicial scrutiny—such as invalidations of unconscionable terms—these agreements remain a primary tool for mitigating provider risks in high-volume digital interactions.

Definition and Purpose

Terms of service, also known as terms of use or terms and conditions, refer to the standardized contractual provisions drafted by a service provider to govern the relationship with users accessing its offerings, such as websites, applications, or digital platforms. These provisions outline the permissible uses of the service, user responsibilities, provider limitations, and potential consequences for violations, functioning as a binding agreement upon user acceptance. Legally, they embody core contract law elements, including an offer from the provider, acceptance by the user, and consideration in the form of service access exchanged for compliance. In the United States, terms of service typically qualify as contracts of , characterized by one party—the provider with superior bargaining power—imposing non-negotiable terms on the other, who must accept them on a "take it or leave it" basis or forgo the service. This structure reflects the practical realities of mass-market services, where individualized is infeasible, though courts scrutinize such contracts for or lack of meaningful assent. Unlike bilateral contracts negotiated between equals, adhesion contracts like terms of service prioritize efficiency and uniformity, often incorporating hyperlinks labeled "Terms of Service" during sign-in or registration processes. Digital terms of service commonly form through electronic means, distinguishing them from traditional paper contracts; acceptance may occur via agreements, requiring affirmative user action such as checking a box or clicking "I Agree," or agreements, implying consent through continued use after notice of the terms. Courts recognize clickwrap as robust evidence of assent, akin to a physical , provided the interface clearly links the action to the terms. These mechanisms adapt general principles to online environments, where mutual assent is inferred from user conduct rather than formal signatures.

Business and User Rationale

Businesses implement terms of service (ToS) primarily to mitigate legal and operational risks by establishing enforceable contractual limits on their , particularly in digital environments where user interactions can lead to disputes over use, content infringement, or service failures. These agreements delineate provider , such as the ability to modify services or suspend accounts for violations, while imposing user obligations like prohibiting illegal activities or spam, thereby enabling proactive defense against abuses that could harm platform integrity or incur regulatory penalties. For instance, ToS allow companies to protect by restricting unauthorized copying or distribution of content, reducing exposure to costly litigation in jurisdictions like the where courts uphold such clauses when properly presented. From a operations standpoint, ToS facilitate by standardizing user expectations across large user bases, supporting revenue models through clauses on payments, subscriptions, or , and providing grounds for terminating problematic accounts without breaching implied warranties. They also signal compliance with laws like the in the U.S., where safe harbor provisions require clear notice of takedown policies, or Europe's GDPR, which mandates transparency in consents embedded within ToS. This risk allocation is causal: without ToS, providers face asymmetric accountability for user-generated harms, as evidenced by cases where absent or weak terms led to multimillion-dollar judgments against platforms for facilitating infringing content. For users, the rationale centers on accessing services under defined conditions, with ToS theoretically offering clarity on entitlements such as refund policies, service availability, or dispute mechanisms, enabling informed choices about whether to engage. implies to rules that prevent exploitation by others, like anti-harassment provisions that maintain a functional environment, and may include limited protections such as disclaimers on efforts or pathways for account recovery. However, this mutual benefit is often theoretical, as ToS function as contracts of —pre-drafted by providers with minimal —prioritizing business safeguards over user recourse, a structure upheld in courts provided basic notice and assent are demonstrated, such as via interfaces. Empirically, users accept ToS to unlock platform utility, but low readership rates—studies showing over 97% of individuals skip reviewing them—reveal a pragmatic where convenience trumps scrutiny, potentially exposing users to unintended waivers of like participation or arbitration mandates. This dynamic underscores ToS as tools for business continuity rather than equitable exchange, with user rationale rooted in necessity for digital participation amid limited alternatives.

Historical Development

Origins in Contract Law

The foundational principles of terms of service trace to core tenets of contract law, which require mutual assent through , supported by , to bind parties. Under traditions originating in and adopted in the United States, an offeror could specify terms as conditions of the deal, with the offeree's acceptance—whether explicit or implied—incorporating those terms into the agreement. This framework, evolving from medieval and actions of in the 16th and 17th centuries, emphasized enforceability based on the parties' manifested intent rather than subjective understandings. Standard form contracts, the direct antecedents of terms of service, proliferated during the in the , as expanding enterprises like railroads and shipping firms sought to manage high-volume transactions without bespoke negotiations. These contracts featured pre-printed boilerplate clauses, such as limitations on liability printed on tickets or bills of lading, which passengers or shippers accepted by purchasing or using the service. For instance, English corporations began systematically deploying such forms by the mid-1800s to standardize dealings with dispersed customers, reflecting a shift from individualized to efficient, unilateral term-setting enabled by and corporate scale. The legal recognition of these as "contracts of adhesion"—non-negotiable agreements drafted by the dominant party—crystallized in 20th-century scholarship amid concerns over power imbalances. Edwin W. Patterson first applied the term to life insurance policies in 1919, noting how insurers imposed standardized exclusions without discussion, while Friedrich Kessler's 1943 analysis framed them as tools of mass distribution that undermined classical freedom of contract by favoring corporate interests over individual agency. Courts initially upheld such terms if notice was provided and no fraud occurred, as in early U.S. cases involving railway tickets, but began scrutinizing for unconscionability under doctrines like those in the Restatement (Second) of Contracts (1981), which codified reasonableness tests for adhesion-like agreements.

Expansion in the Digital Era

The advent of widespread and in the mid-1990s marked the transition of terms of service from physical formats to digital equivalents, enabling service providers to impose standardized conditions on millions of users efficiently. Early digital precursors built on shrinkwrap s for boxed software, which gained judicial validation in ProCD, Inc. v. Zeidenberg (1996), where the U.S. Court of Appeals for the Seventh Circuit held that a restricting commercial use of a phone directory database—disclosed after purchase but with return options—was enforceable under contract law, as the buyer had reasonable notice and opportunity to reject. This ruling, rejecting arguments that such terms unconscionably modified sales under the , encouraged software vendors to experiment with embedded licensing, laying groundwork for online adaptations as distribution shifted to downloads and web-based services. Clickwrap agreements, requiring explicit user assent via an "I agree" button after reviewing terms, emerged in the late 1990s as companies like early sites (e.g., Amazon.com, launched 1995) and dial-up providers (e.g., ) standardized them for account creation and transactions. The U.S. Electronic Signatures in Global and National Commerce Act (E-SIGN), effective October 1, 2000, further propelled this by granting electronic records and signatures legal parity with paper counterparts, provided parties consented to electronic form and retained records accessibly. Courts began upholding clickwraps when terms were conspicuous and tied to assent, as in Feldman v. , Inc. (2007), where the U.S. District Court for the Eastern District of enforced an because users clicked "Yes, I agree" next to a displaying the full terms. Conversely, Specht v. Communications Corp. (2002) invalidated a license (terms via unobtrusive without required review) for failing to provide adequate notice during plugin downloads, establishing that passive notice alone often insufficiently forms contracts. By the 2000s, terms of service proliferated across websites, apps, and platforms, expanding in length and scope to address novel digital risks like , data processing, and automated enforcement. services, such as social networks, incorporated broad licenses granting providers perpetual rights over uploaded material; for instance, Facebook's proposed 2009 terms update, which would have retained licenses to deleted user content, drew widespread criticism for overreach, prompting reversion to terminable grants. This era saw terms evolve into comprehensive documents averaging thousands of words, often bundling liability limitations, mandatory , class action waivers, and rules, with enforceability hinging on design elements like hyperlinked notices during sign-in processes, as affirmed in cases like Cullinane v. Uber Technologies, Inc. (2018). The shift facilitated scalable business models but raised concerns over adhesion contract dynamics, where users encounter non-negotiable terms amid low readership rates—studies indicate over 90% of users accept without review.

Typical Provisions

Core User Obligations

Core user obligations in terms of service agreements typically require users to engage with the service lawfully, responsibly, and without causing to the provider or other users. These provisions establish baseline conduct expectations, such as providing truthful and safeguarding access credentials, to mitigate risks like or unauthorized access. Failure to comply often triggers remedies like account suspension or termination by the provider. A fundamental obligation is adherence to applicable laws and regulations, prohibiting users from employing the service for illegal purposes, including fraud, harassment, or distribution of prohibited content such as malware or infringing materials. Acceptable use policies commonly extend this by barring disruptive behaviors like spamming, excessive automated access (e.g., scraping without permission), or interference with service operations, which could degrade performance for others. Users must also maintain account integrity by supplying accurate, complete information during registration and updates, and by protecting login credentials against unauthorized sharing or disclosure. This includes responsibilities for monitoring account activity and promptly notifying providers of suspected breaches. Eligibility criteria often stipulate minimum age requirements (e.g., 13 or 18 years, depending on ) or for minors, ensuring users have the legal capacity to agree to the terms. Additional obligations frequently involve respecting intellectual property rights, such as refraining from copying, modifying, or reverse-engineering protected content without authorization, and avoiding unauthorized commercial exploitation of the service. In software contexts, users may be barred from transferring licenses or failing to uninstall software upon termination. Indemnification clauses commonly require users to hold providers harmless for liabilities arising from their violations, shifting costs back to the responsible party.

Provider Rights and Limitations

Service providers in terms of service agreements commonly reserve the right to unilaterally modify the terms, services, or pricing, typically requiring users to review and accept changes to maintain access. This provision allows providers to adapt to evolving legal, , or operational needs without renegotiating individual contracts. For instance, updates may occur with notice via or platform posting, and continued use constitutes acceptance. Terms often include a "Last Updated" date, indicating the most recent revision or amendment by the provider and alerting users to potential changes since their last agreement; updates typically take effect immediately upon posting, with users responsible for periodically reviewing them. Providers also assert rights over user accounts and content, including the authority to suspend, terminate, or restrict access for alleged violations of the terms, such as prohibited conduct or misuse. In platforms hosting , this extends to monitoring, editing, or removing material deemed inappropriate, illegal, or infringing, often without prior notice to users. Users typically grant providers a broad, to use, reproduce, and sublicense such content for service operations, advertising, or improvements, while providers retain full ownership of their own like software and branding. Federal statutes like of the further shield online providers from liability as publishers of third-party content, provided they do not materially contribute to its illegality. To mitigate risks, terms often include limitations on provider liability, disclaiming warranties and capping damages—commonly to the amount of fees paid in the prior 12 months or a fixed sum like $10,000. These clauses exclude indirect, consequential, or punitive damages and apply on an "as is" basis, protecting against claims from service interruptions, data loss, or user interactions. For digital downloads platforms, comprehensive terms typically feature a no-refunds policy, emphasizing the intangible and irreversible nature of digital goods once delivered, alongside strong liability limitations that disclaim responsibility for compatibility issues, download failures, or content usability beyond basic provision. However, enforceability varies; limitations may not hold for gross negligence, willful misconduct, or in regulated contexts like ERISA fiduciary duties, where they can be void as against public policy. Providers remain obligated to comply with applicable laws, such as responding to DMCA takedown notices to maintain safe harbor protections under copyright law.

Dispute Resolution Clauses

Dispute resolution clauses in terms of service (ToS) agreements outline the mechanisms for resolving conflicts between service providers and users, typically prioritizing (ADR) over court litigation to streamline processes and reduce costs. These provisions mandate specific steps, such as or followed by binding , thereby limiting users' access to judicial remedies like trials. In online ToS, is the predominant method, enforced under the (FAA), which reflects a U.S. policy favoring arbitration agreements in commercial contracts. Common elements include requirements for users to submit disputes to a neutral arbitrator rather than filing lawsuits, often administered by organizations like the (AAA) or JAMS. Clauses frequently incorporate waivers, prohibiting users from pursuing collective claims and requiring individual , a practice upheld by the U.S. in cases involving agreements. Additional provisions specify governing law—commonly or for U.S.-based providers—and venue restrictions, such as in certain counties or via online platforms for efficiency in disputes. Multi-step processes are also standard, starting with informal resolution attempts before escalating to formal , aiming to resolve issues without third-party intervention. In digital service ToS, such as those for or platforms, these clauses address disputes over account termination, data , or payment issues by channeling them into confidential proceedings. Providers include windows—typically 30 days post-acceptance—for users to reject and preserve court rights, though low opt-out rates underscore the clauses' stickiness once agreed upon. Forum selection subclauses designate specific locations or virtual hearings, minimizing travel burdens while centralizing control with the provider's preferred . Overall, these clauses standardize dispute handling across global user bases, adapting traditional contract principles to scalable online environments.

Enforceability

Contract Formation Requirements

For a terms of service agreement to form a valid under principles applicable in the United States, the fundamental elements of offer, , and must be present, alongside mutual assent demonstrated through reasonable of the terms and an affirmative manifestation of agreement by the user. The offer typically consists of the presenting access to the platform or service conditioned on adherence to the specified terms, which are often displayed via or direct text during user onboarding. requires the user to objectively manifest assent, such as by clicking an "I Agree" button after being prompted to review the terms, ensuring the interaction meets the objective theory of formation that evaluates outward actions rather than subjective intent. is satisfied by the mutual exchange where the provider grants service access and the user promises compliance, such as refraining from prohibited uses like . In online contexts, courts distinguish between "" agreements, which generally satisfy formation requirements due to explicit user action (e.g., checking a box or clicking accept proximate to the terms), and "" agreements, which rely on through mere website use and a to terms, often failing unless the is conspicuous and the user has actual or inquiry of the terms. mechanisms have been upheld in numerous federal circuits, as they provide clear evidence of assent, whereas enforceability hinges on factors like prominence, repeated exposure during use, and the user's sophistication, with courts rejecting them when terms are buried or users could proceed without affirmative agreement. Hybrid "sign-in-wrap" approaches, where terms are referenced during account creation or login, may form contracts if users are reasonably notified and assent is required to proceed, but outcomes vary by design details such as pop-up prompts or checkboxes. Additional requirements include user capacity (e.g., being of and mentally competent) and the of terms, preventing formation if provisions violate or statutes like the for goods-involved services or the Electronic Signatures in Global and National Commerce Act (E-SIGN) for electronic records' validity. Providers must also ensure terms are not modified post-formation without adequate notice and renewed assent, as unilateral changes typically require user re-acceptance to bind, reflecting the need for ongoing mutual consent in dynamic digital environments. Failure to meet these thresholds results in non-binding terms, treating the relationship as governed by default laws rather than the proffered conditions.

Judicial Review and Standards

Courts assess the enforceability of terms of service under established contract law principles, requiring evidence of mutual assent through reasonable of the terms and an affirmative manifestation of acceptance by the user. agreements, which mandate users to click an "I agree" after being presented with the terms, are generally upheld as they demonstrate clear assent, whereas or sign-in wrap agreements—relying on or incidental notice during registration—face stricter scrutiny and often fail without proof of actual or inquiry . For example, in Berman v. Freedom Financial Network, LLC (30 F.4th 849, 9th Cir. 2022), the Ninth Circuit invalidated terms due to insufficient from a non-conspicuous and an ambiguous "continue" that did not explicitly signify agreement. Reasonable notice demands conspicuous presentation, evaluated by factors such as visibility (e.g., blue and underlined text), proximity to the assent mechanism, font legibility, and absence of visual clutter obscuring the terms. In Specht v. Netscape Communications Corp. (306 F.3d 17, 2d Cir. 2002), the court refused to enforce a where terms were buried in inconspicuous hyperlinks not reasonably calculated to alert users during . By contrast, Meyer v. Uber Technologies, Inc. (868 F.3d 66, 2d Cir. 2017) upheld Uber's because a dedicated registration screen required users to scroll through and accept the full terms before proceeding, providing adequate notice despite the mobile context. Even presumptively valid terms may be partially or wholly invalidated for , a doctrine codified in § 2-302 and adopted variably by states, allowing courts to refuse enforcement of clauses that are procedurally oppressive (e.g., contracts with no opportunity or hidden terms) and substantively unfair (e.g., grossly one-sided liability waivers or penalties shocking the conscience). Courts apply a sliding scale, often requiring both elements, and may sever offending provisions rather than void the entire agreement. In Bragg v. Linden Research, Inc. (487 F. Supp. 2d 593, E.D. Pa. 2007), the district court deemed Second Life's terms procedurally unconscionable as a non-negotiable contract, rendering certain clauses unenforceable. Public policy violations, such as terms exculpating or violating statutory protections, independently bar enforcement, with arbitration clauses in terms of service receiving deference but remaining vulnerable to attacks if they disproportionately burden users (e.g., high fees or waived remedies). Recent rulings underscore evolving standards: in Sellers v. JustAnswer LLC (73 Cal. App. 5th 444, 2021), a rejected a sign-in wrap for lacking both conspicuous notice and explicit assent during account creation. These standards prioritize user protection against opaque digital contracting while upholding legitimate provider interests in defined relationships.

Benefits

Protections for Service Providers

Terms of service agreements provide service providers with mechanisms to limit financial exposure through limitation of liability clauses, which cap recoverable to amounts such as fees paid by the user or a fixed sum, thereby preventing disproportionate claims from service interruptions, data breaches, or third-party harms attributable to user actions. This includes scenarios of underage access to adult content, where terms require users to represent and warrant their accurate age declaration; if users lie, platforms can argue they sought verification but were misled by the false representation, thereby mitigating liability for the access. These provisions align risk with the contract's economic value, as unlimited liability could otherwise expose providers to claims exceeding their revenue from individual users, as seen in cases where courts uphold caps absent . Indemnification clauses further safeguard providers by obligating users to reimburse costs, including legal fees, arising from the user's violations of laws, infringements, or misuse of the platform, such as uploading infringing content or engaging in fraudulent activities. This shifts responsibility to users for their conduct, reducing the provider's burden in defending against downstream claims, particularly in environments where providers lack direct control over postings. Providers also secure broad licenses to user-submitted content, enabling reproduction, distribution, and modification for service operations without ongoing permissions, which supports and while retaining of . Termination and suspension allow swift removal of violating accounts or content, mitigating legal risks from illegal activities and preserving platform integrity without prior judicial intervention. and class action waivers streamline , avoiding costly jury trials and collective suits that could amplify damages.

Advantages for Users

Terms of service agreements establish clear expectations for both parties, delineating the scope of services provided and the conditions under which users may access them, which reduces the potential for misunderstandings and disputes over service functionality or availability. By outlining provider obligations, such as basic service standards or response times where specified, these agreements furnish users with a contractual foundation to seek remedies if the provider fails to deliver as promised, thereby enhancing accountability. Users benefit from provisions that empower providers to enforce rules against abusive behavior, such as spam, , or unauthorized access, through mechanisms like account suspension or termination, which preserves the platform's integrity and usability for compliant participants. This enforcement indirectly safeguards users by mitigating risks from malicious actors, fostering a more reliable environment for interaction and content consumption. Furthermore, well-drafted terms promote mutual understanding of rights and responsibilities, which empirical analysis links to improved and sustained user satisfaction by aligning expectations with actual delivery. In cases where terms incorporate user-centric elements, such as handling assurances or dispute escalation paths, they offer transparency that builds confidence in the provider's operations, though such inclusions vary widely across services.

Criticisms

Length and Readability Issues

Terms of service agreements for major online platforms frequently exceed 10,000 words in length, rendering them substantially longer than standard book chapters or legal briefs. For instance, as of April 2020, Apple's terms totaled 15,260 words, while Spotify's reached 8,600 words, and averages across leading services hovered between 7,000 and 12,000 words. platforms' terms average 6,141 words, equivalent to 13.5 single-spaced pages, with some like extending to 18,282 words—requiring over two hours to read at typical speeds. Across broader samples, in consumer agreements averages 10,835 words, demanding approximately 54 minutes of continuous reading. These documents employ dense, technical language that elevates challenges beyond mere volume. Empirical assessments using the Flesch-Kincaid Grade Level metric indicate that most terms of service require 12th-grade or higher comprehension, often demanding first-year college-level education for full understanding. A analysis of popular online contracts found 99% fell below recommended readability thresholds, with 70.4% exceeding the 25-word average sentence length guideline and featuring complex unsuitable for general audiences. Flesch Reading Ease scores, which range from 0 to 100 with higher values denoting simpler text, typically register in the 30-50 range for these agreements—deemed "difficult" to "very difficult" by standard interpretations, far below the 60-70 ideal for consumer documents. Such opacity stems from provisions packed with legalese, cross-references, and subordinate clauses, prioritizing comprehensive coverage of liabilities over . Big data analyses of millions of contracts confirm persistent low over decades, with minimal improvements despite calls for simplification. Critics argue this structure functionally discourages scrutiny, as the —combining length with linguistic barriers—exceeds practical tolerances for non-expert users.

Claims of Unfair Terms

Critics contend that terms of service frequently incorporate clauses that impose disproportionate burdens on users while shielding providers from accountability, such as broad exclusions of for or data breaches. These provisions are argued to violate principles of by creating a significant imbalance not reasonably necessary for the provider's legitimate interests. For instance, clauses disclaiming all or limiting remedies to service credits, even in cases of provider , have been highlighted as substantively unfair because they unexpectedly allocate risks to the weaker party. Mandatory arbitration requirements represent another focal point of criticism, as they often compel individual resolution without class actions, impose high upfront costs, and preclude judicial review, effectively favoring providers with greater resources. In the 2021 case of Uber Technologies Inc. v. Heller, the Supreme Court of Canada declared Uber's arbitration clause unconscionable, citing the $14,000 minimum cost to initiate proceedings—far exceeding the potential claim value—as an insurmountable barrier that rendered the term oppressively one-sided. Similarly, unilateral modification clauses allowing providers to alter terms at any time without user consent or adequate notice have been challenged for undermining mutuality, as seen in a 2025 U.S. Fourth Circuit ruling that deemed such a provision illusory under Maryland law due to its vagueness and lack of reciprocity. Additional claims target indemnification requirements obligating users to cover the provider's legal fees for any disputes, regardless of fault, and prohibitions on negative reviews or criticism, which stifle expression. In jurisdictions like the , regulators identify excessive cancellation penalties—exceeding actual losses—as unfair if they deter users from exercising rights without justification. Empirical analyses using have detected such patterns across platforms, estimating that up to 20-30% of clauses in sampled ToS exhibit hallmarks of unfairness, including overbroad grants or perpetual data usage rights post-termination. Proponents of these critiques argue that the non-negotiable nature of ToS exacerbates procedural , though courts variably enforce doctrines like the U.S. Uniform Commercial Code's § 2-302 only when terms shock the conscience.

Public Awareness and Usage Patterns

Empirical Studies on Reading Habits

Empirical studies consistently demonstrate that the overwhelming majority of users do not read terms of service (ToS) or analogous agreements, such as end-user license agreements (EULAs) and policies, prior to consenting. A 2010 experimental study presented at the Symposium on Usable Privacy and Security (SOUPS) found that fewer than 2% of the population reads EULAs during software installations, based on prior behavioral research indicating negligible engagement with these lengthy documents. This low adherence persists despite legal presumptions of assent through clicking "I agree," highlighting a disconnect between formal formation and actual user behavior. Survey data from broader populations reinforces this pattern. In a 2019 Pew Research Center survey of U.S. adults, only 9% reported always reading a company's before agreeing to its terms and conditions, with an additional 13% doing so often, 38% sometimes, and 36% never. Among those who ever read such policies, engagement was superficial: just 13% read them fully, while 43% glanced over without close examination. Demographic factors influence habits; older adults showed higher full-reading rates (26% for ages 65+ versus 15% for ages 18-29), and lower-income households (≤30,000annually)reportedeverreadingpoliciesmorefrequently(6830,000 annually) reported ever reading policies more frequently (68%) than higher-income ones (≥75,000: 52%). Observed behaviors in controlled settings yield even starker results. A study cited in legal observed that only 1 to 2 in 1,000 online shoppers access privacy policies linked to ToS, suggesting self-reported surveys may overestimate reading due to . These findings underscore systemic non-engagement, driven by document length (often exceeding 10,000 words at college-level ), time costs, and perceived irrelevance, rather than mere oversight.
Study/SourceYearKey MetricDetails
SOUPS (Textured Agreements)2010<2% read EULAsPopulation-level estimate from prior behavioral studies on software installations.
20199% always read; 36% neverU.S. adults; includes breakdowns by age, income, gender; 13% full reads among ever-readers.
Shopper Access Observation (cited in Dammann)Pre-20180.1-0.2% access policiesActual clicks on privacy policy links during , far below self-reports.
In contract law, particularly in the United States, terms of service (ToS) are generally enforceable against users even if they do not read or fully comprehend the provisions, provided there is reasonable notice of the terms and a manifestation of assent, such as through a "clickwrap" agreement requiring explicit acceptance. Courts apply a reasonableness standard to assess notice, evaluating factors like hyperlink conspicuousness, interface design, and user interaction, but do not mandate actual understanding or informed comprehension akin to medical consent protocols. This approach stems from the principle that parties are bound by contracts they enter, with ignorance or negligence in reviewing terms not serving as a defense, as affirmed in numerous rulings distinguishing enforceable clickwraps from weaker "browsewrap" formats where terms are merely hyperlinked without active agreement. Empirical data underscores a disconnect between legal validity and genuine , as studies indicate that 91% of users accept ToS without reading them, often spending mere seconds on review. Similarly, in a 2025 survey, 98% of participants agreed to a fabricated form granting away to name their firstborn child, highlighting how users routinely bypass scrutiny of dense, technical language averaging thousands of words at a 10th-12th grade reading level. These patterns imply that assent functions more as procedural compliance than deliberate endorsement, potentially undermining the causal link between user action and awareness of obligations like mandatory , , or liability waivers, which courts enforce absent proof of or . Critics, including legal scholars and ethicists, contend that this framework erodes true informed consent by prioritizing efficiency in digital transactions over user autonomy, especially for provisions involving irrevocable rights transfers, such as personal data under privacy policies integrated into ToS. In jurisdictions like the European Union, where GDPR mandates "freely given, specific, informed, and unambiguous" consent for data processing, ToS complexity has prompted regulatory scrutiny, with findings that lengthy documents preclude meaningful understanding and thus question consent's validity for sensitive processing. While U.S. courts rarely invalidate ToS on comprehension grounds alone—upholding them in cases like Uber's arbitration clauses despite user claims of unawareness—such practices raise policy concerns about power imbalances, potentially incentivizing providers to obscure unfavorable terms in verbose formats to secure de facto consent without negotiation. This tension has fueled proposals for layered disclosures or mandatory summaries, though adoption remains limited, preserving the status quo where legal enforceability diverges from empirical evidence of uninformed agreement.

Notable Controversies and Litigation

Historical Cases

One of the earliest significant challenges to mass-market licensing terms, which laid groundwork for modern terms of service (ToS) enforceability, arose in ProCD, Inc. v. Zeidenberg (1996). ProCD sold a consumer database software product containing a with licensing terms printed inside the package restricting commercial use and allowing return for refund if terms were unacceptable. Matthew Zeidenberg purchased the product, extracted data to create a commercial phone listing service, and ignored the restrictions. The ruled the license enforceable under the , holding that terms disclosed post-purchase but before use constituted a valid offer, via retention and use, and consideration through the opportunity to return the goods. This decision affirmed that software vendors could impose usage limits via "shrinkwrap" agreements, influencing subsequent online ToS by validating non-negotiated, post-sale terms provided users have notice and an opt-out mechanism. In contrast, Specht v. Netscape Communications Corp. (2002) highlighted limitations on enforcing terms without explicit user assent, particularly for downloadable software. Plaintiffs downloaded Netscape's SmartDownload plugin, which included a separate browser window with license terms (including an arbitration clause) that users were not required to scroll through or affirmatively accept to proceed. The Second Circuit Court of Appeals reversed the district court's enforcement of the arbitration provision, determining that the terms constituted a "browsewrap" agreement lacking reasonable notice or manifestation of assent, as users could complete the download without encountering or agreeing to the full conditions. The court distinguished this from enforceable "clickwrap" agreements requiring active clicking of "I agree," establishing that mere availability of terms on a webpage does not bind passive users, a principle that has shaped scrutiny of website ToS visibility and consent mechanisms. These cases underscored early tensions in digital contracting: ProCD supported vendor-imposed limits where is feasible, while Specht emphasized the need for conspicuous to avoid unconscionable surprises, influencing federal circuits' approaches to ToS until the mid-2000s. Conflicting rulings, such as Klocek v. (2000) in the Tenth Circuit—which rejected shrinkwrap enforceability by treating terms as mere proposals rather than integrated offers—revealed circuit splits that prompted further litigation on uniform standards for electronic agreements.

Recent Developments and Rulings

In the , federal courts have issued several rulings in 2024 and 2025 scrutinizing the and assent requirements for terms of service, particularly clauses in and sign-in wrap agreements. On March 27, 2025, the U.S. Court of Appeals for the Ninth Circuit in Berman v. Freedom Financial Network, LLC invalidated an provision because the terms were presented in small, gray font below a "Continue" , lacking conspicuous and of mutual assent through mere use. This decision underscores that agreements inferring from conduct alone require heightened visibility of hyperlinks and user interaction to be enforceable. Similarly, on February 27, 2025, the Ninth Circuit in Chabolla v. , Inc. clarified that terms demand explicit notification beyond passive browsing, rejecting implied acceptance without affirmative steps. However, a federal court on March 27, 2025, enforced a statement linked at the page bottom, dismissing an adtech on grounds of implied user via continued site engagement. The U.S. in Coinbase, Inc. v. Suski on May 20, 2024, addressed conflicts arising from multiple user agreements, holding that courts—not —must resolve which contract governs a dispute when provisions clash, such as between a platform's core terms mandating and a secondary agreement permitting class actions. This ruling affects services with layered or updated terms, prioritizing judicial threshold determinations over delegated arbitrator authority. In the , the Digital Services Act's full enforcement since February 17, 2024, has compelled revisions to terms of service for transparency in content restrictions and moderation rationales. On October 24, 2025, the found Meta and in violation of DSA transparency obligations for inadequate disclosure of processes handling illegal or harmful content, directly implicating terms that must now specify enforcement criteria and user appeal rights to avoid penalties up to 6% of global turnover. These actions signal ongoing regulatory pressure on platforms to align terms with user notification mandates, contrasting U.S. case-by-case .

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