iAs we discussed last week and the week before, most effective Terms of Use (also known as Terms of Service (TOS)) address seven key concepts: (1) the uses of the website and its services which are permitted by the website operator; (2) the manner in which user-created content is handled by the website operator; (3) an appropriate disclaimer of warranties which might otherwise apply to the website content or services; (4) a provision limiting the liability of the website operator for certain types of conduct; (5) a reference to the website's privacy policy or explanation of how information belonging to website users is collected, maintained, and used; (6) an explanation of which state's law governs the Terms of Use and where and how disputes between the website operator and a user will be resolved; and (7) a provision describing how and under what circumstances the terms of the Terms of Use may be modified.
In this series of posts, we are identifying and briefly describing each of the seven key elements of effective Terms of Use. This week's element is:
3. Disclaimer of Warranties. A warranty is a promise by the seller of a product or service that the product or service is as represented. It may be an express warranty, which arises from the representation of the seller, or an implied warranty, which arises by operation of law. Common warranties include: (1) the implied warranty of merchantability (or fitness for the ordinary purposes for which the product is to be used) - a guarantee to the buyer that the product conforms to ordinary standards of care and that they are of the same average grade, quality, and value as similar goods sold under similar circumstances; (2) the implied warranty of fitness for a particular purpose - a guarantee to the buyer that the product is fit for the particular, nonordinary purpose, for which it is to be used; and (3) the warranty of non-infringement - a guarantee provided by a merchant who regularly deals in a particular type of product that the product does not infringe the intellectual property rights of any other person.
A disclaimer of warranties acts to disclaim or deny warranties which would otherwise apply to the product or service. Such a provision is included in a website's Terms of Use to eliminate warranties which would otherwise attach to the transaction or limit the applicable warranties to only those expressly provided by the website operator. Many states permit implied warranties to be disclaimed by simply indicating that the product or service in question is provided "AS IS."
While Google indicates that it provides its services "using a commercially reasonable level of skill and care," its Terms of Service also provides that:
OTHER THAN AS EXPRESSLY SET OUT IN THESE TERMS OR ADDITIONAL TERMS, NEITHER GOOGLE NOR ITS SUPPLIERS OR DISTRIBUTORS MAKE ANY SPECIFIC PROMISES ABOUT THE SERVICES. FOR EXAMPLE, WE DON’T MAKE ANY COMMITMENTS ABOUT THE CONTENT WITHIN THE SERVICES, THE SPECIFIC FUNCTIONS OF THE SERVICES, OR THEIR RELIABILITY, AVAILABILITY, OR ABILITY TO MEET YOUR NEEDS. WE PROVIDE THE SERVICES “AS IS”.
Similarly, Facebook provides that:
WE ARE PROVIDING FACEBOOK AS IS WITHOUT ANY EXPRESS OR IMPLIED WARRANTIES INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT.
State law varies with respect to which warranties may be disclaimed and the language, typeface, and presentation necessary to effectively disclaim those warranties. Accordingly, when preparing a disclaimer of warranties for a website's Terms of Use, it is particularly important to consult with a competent attorney.
This is the third in a series of posts describing the seven key elements of effective website Terms of Use. Next week, we will address the third key element of effective Terms of Use: limitation of liabilities.
When preparing Terms of Use or any other contract, one should seek the advice of a competent, properly-licensed attorney. The failure to do so may result in Terms of Use that provide no protection or, worst yet, may create legal exposure where none previously existed.
