What if this happened to you?
You’re scrolling along on your favorite social media platform when you stop short. You recognize the content you’re reading.
Not because you’ve read it before. But because you wrote it. Word for word. And it was content that previously only existed inside your paid membership.
This is theft of your Intellectual Property and would be a violation of the Intellectual Property clause in the Terms of Use for your digital product.
As long as you had actually implemented Terms of Use for your digital product.
Having the correct legal documents in place can head off a lot of the headaches and costs of unnecessary legal battles.
So if you have an e-course, membership, or offer any downloadable product, let’s make sure your Terms of Use are in place.
**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.**
What are Terms of Use?
Terms of Use are the terms and conditions that govern the relationship between you and your customers regarding the use of your digital products.
In other words, Terms of Use are the contract you make with your customers.
If you’re sitting there wondering why you weren’t aware of their importance before now, it could be because they aren’t actually legally required.
That makes them all too easy to overlook.
But here’s the thing, your Terms of Use are the first place a Court will look if a dispute about your digital product arises between you and one of your customers.
So while they may not be legally required, they are critical.
Why you need Terms of Use for your digital products
Your Terms of use lay the ground rules for your digital product and should include provisions for things like your:
- Payment options
- Refund and/or cancellation policy
- How your product’s content can (and can’t) be used
- Limitations of liability (release from claims) and disclaimers (especially in licensed industries like health/medical, legal, and financial)
- Use of third-party and affiliate links
- Right to terminate access for a violation of your Terms of Use, including failure to meet payment requirements
- How and where disputes will be handled
And the list goes on.
In short, your Terms of Use are a legally savvy way to safeguard your business, manage customer expectations, and ensure that your products are used in the way that you intended.
Create effective Terms of Use for your digital products
When you create Terms of Use for your product, think about how you’ll protect both you and your customers.
You’re not trying to take advantage of your customers, but you also want to avoid being liable if something goes wrong.
To strike a balance between these two goals:
- Make your Terms of Use clear.
Customers should be able to read them and easily understand exactly what they’re agreeing to.
- Keep provisions comprehensive and specific.
See the above outline of common conditions to consider, and ensure that the provisions you include are specific to your business.
- Ensure your Terms of Use are enforceable.
Be prepared in the event that a dispute does arise and you need to take legal action.
Make sure your Terms of Use are enforceable
That last point is critical. If you can’t enforce your Terms of Use, they won’t do you any good.
Your customers need to agree to your Terms of Use BEFORE they even enter their information at checkout and proceed to purchase your digital product.
This can be done in a number of ways, as long as you require them to take action, such as having them check a box or click a button indicating their acceptance.
By collecting their agreement this way, you create an enforceable contract under the E-Sign Act, whether your customer actually chooses to read the Terms or not.
Keep records of your Terms of Use
Even if you never have to take legal action, and I sincerely hope you don’t, keeping records of your Terms of Use agreement is important.
And not just the Terms of Use you currently have in place.
You want to keep records of previous versions and the dates they were used.
That way, in the event a dispute does arise down the road, you can reference documentation of the appropriate versions of your terms.
I also recommend you keep records that demonstrate a customer MUST agree to your Terms before proceeding to make a purchase.
And this can be as simple as a Zoom video showing your checkout process!
Bonus tip: use a document management system, even something like Google Drive, to keep your records secure and easily accessible.
A summary of the key points for Terms of Use for your digital products
When you get to that point in your business, selling a digital product is an exciting way to scale.
Because you want to hold onto that excitement and avoid the headaches and hassle of legal trouble, it’s important to have Terms of Use in place that protect you and your customers.
Your terms should be clear, comprehensive, and enforceable so that you have the legal documentation you need to back up your case if a dispute arises.
Keep records of your agreements with customers so that you have evidence of their acceptance of your terms, and rest easy knowing this aspect of your business is protected.
If you still need solid Terms of Use for your digital product, snag an attorney-drafted template from the legal shop!
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