It’s 8 am, and you’re sifting through your over-stuffed inbox when you absently notice an email with the subject line “Important Notice of Our Updated Terms of Use.”
Your eyes glaze over.
Terms and Conditions don’t make for sexy subject matter. And you weren’t going to use that account today, anyway.
*DELETE*
And you probably didn’t even open it.
Stories like this are the basis for recent case law that clearly show notifying your digital product purchasers of changes to your Terms of Use needs to be a comprehensive effort.
If you make changes to your terms, you must notify your digital product purchasers.
But more importantly, you should ask them to take action to ensure your updates are actually enforceable.
**And just before we go any further:
Everything I share is legal education and information. It’s not business, financial, or legal advice, and it doesn’t create an attorney-client relationship between us.
Please chat with an attorney in your area to make sure you’re protecting your business.**
Clickwrap agreements for your Terms of Use
If you think of Terms of Use as the contract you make with your customers, you know you need to get that contract “signed.”
And a widely accepted gold star business practice to make that happen is having your purchasers consent with a clickwrap agreement.
Essentially, this is a box your purchasers can check or a button they can click to acknowledge they’ve read and understood your terms.
All good, right?
Only until you make changes or updates.
That’s where things have gone off the rails for some companies.
A lesson on updating Terms of Use from Dropbox
California passed a court ruling in April that made it clear you can’t simply include a provision in your original Terms of Use stating that you can change or update them at will.
You must notify your consumers of the changes.
Then a lawsuit against Dropbox (which they ultimately lost) upped the ante even more. (Sifuentes v. Dropbox, 20-cv-07908-HSG (N.D. Cal. Jun. 29, 2022))
What we learned from that ruling is that simply emailing notification of your changes likely won’t be enforceable in a court of law. Not unless you have a way of proving your customer read them.
And even then, it may not be enough.
So what is enough?
Best practices for changing or updating your digital product’s Terms of Use
First, be aware that even if you included a “continued use” provision in your original Terms of Use, all of the following advice still applies.
To update your Terms of Use the right way (so they might actually be legally enforceable):
- Notify your purchasers immediately of any changes or updates to your Terms of Use.
- Send notice via email with tracking or read receipts enabled.
- Communicate changes in plain language – make them easy to understand and agree to.
- If possible, give notice of updated terms within your service and prevent users from accessing their product account until they take action to agree to the new terms.
- Consider informing your customers of any changes to your Terms of Use in a few different ways, such as through email, social media, and on your website.
Develop a process for updating your Terms of Use
In the end, legal experts recommend a multi-tiered approach to provide notice to users for the greatest protection and in an effort to make your Terms of Use enforceable.
So however you decide to communicate changes to your users, like with anything we do in our online businesses, a great practice is to develop and document a process you can follow each time.
This way, you’ll be sure you aren’t missing out on any important steps and leaving yourself open to legal issues.
And if you need a great place to start, snag a whole Digital Product legal bundle here and set yourself up for success.
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