Terms of Service
Terms of service establish the legal relationship between your platform and its users — what is permitted, what is prohibited, and what happens when rules are broken.
What is a Terms of Service?
Terms of service (ToS) — also called terms and conditions or terms of use — is the legal agreement between a platform and its users that governs how the platform may be used. They set out the rules of conduct, the platform's IP rights, limitations of liability, account termination rights, and dispute resolution provisions.
For Australian businesses, terms of service must comply with the Australian Consumer Law, which imposes restrictions on unfair contract terms in standard form contracts. Provisions that are broadly drafted, create significant imbalance between the parties, or are not reasonably necessary to protect a legitimate interest may be unenforceable as unfair terms.
When do you need a Terms of Service?
- ✓Before launching any website, app, or online platform used by third parties
- ✓When changing the rules or acceptable use policy of an existing platform
- ✓When adding a new feature or service category to your platform
- ✓When your platform grows to a scale where user conduct rules need to be formally documented
Key provisions to include
Account Registration
Requirements for creating an account, including age restrictions and accuracy of information.
Acceptable Use Policy
What users may and may not do on the platform — prohibited content, conduct, and uses.
Intellectual Property
Platform's IP rights and the licence granted to users for their own content.
User Content
Rules for content posted by users, including the platform's right to remove content and the licence granted to host it.
Fees & Billing
Payment terms, refund policy, and automatic renewal terms for paid services.
Suspension & Termination
Platform's right to suspend or terminate accounts for breach.
Limitation of Liability
Cap on the platform's liability for service interruptions and third-party content.
Dispute Resolution
How disputes between users and the platform are resolved.
Common mistakes to avoid
Including provisions that are unfair under Australian Consumer Law — these can be struck out and create regulatory risk
Not requiring users to actively accept terms (clickwrap acceptance) — passive browsewrap acceptance is harder to enforce
Not updating terms when the platform materially changes, leaving users subject to outdated rules
Frequently asked questions
What is the difference between terms of service and a SaaS subscription agreement?
Terms of service typically govern the relationship with all platform users (including free users), covering acceptable use, IP, and conduct. A SaaS subscription agreement governs the commercial relationship with paying customers, covering billing, uptime, data processing, and enterprise obligations. Paid SaaS platforms often need both.
Can I make users agree to my terms by just posting them on my website?
Browsewrap agreements (where users are deemed to have agreed by using the site) are less enforceable than clickwrap agreements (where users actively check a box or click 'I agree'). For key terms — particularly those limiting liability — active acceptance at sign-up or checkout provides stronger enforcement.
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