What Are Terms and Conditions?
When users download a mobile app and agree to the terms and conditions, they are entering a contractual relationship with you as the developer. The terms and conditions that you use for your app therefore carry legal weight. They form a key part of your legal protection.
Terms and conditions are designed to set out the scope or limitations of your services. They should also clarify what you expect from users, their rights and responsibilities, and what will happen if either party breaches the terms. In some cases terms and conditions may be necessary to comply with specific legal requirements , e.g. in relation to gambling apps or those that process payments.
Comprehensive terms and conditions will also help you to manage disputes. All your users should at least be aware of the procedures for reporting and dealing with any problems, as well as any potential consequences that might arise.
In addition to these legal considerations, users are much more likely than they used to be to read the contract they are entering into. They might not actually do it, but they will at least understand that there is something to read and may have a flick through. If they see that the terms and conditions are thorough and well-drafted they are more likely to be impressed. In contrast, poorly issued terms and conditions could leave potential customers feeling unimpressed with the app and the services you offer.
Essential Elements of a Mobile App Terms and Conditions Document
The types of terms and conditions typically found in apps include:
User obligations. Just as in website T&Cs, the terms of use for an app tend to require users to comply with all applicable laws, respect other users’ rights and not attempt to, among other things, redistribute, modify, disassemble, exploit, misappropriate or interfere with the app, collect others’ personally identifiable information or infringe any intellectual property rights.
Limitations of liability. Often, but not exclusively for commercial apps, the T&Cs seek to restrict liability as much as possible. As with most commercial relationships, the general rule is caveat emptor. The app T&Cs should make the point clear from the outset that the app is provided "as is," with no express or implied warranties, and that the app owner and its affiliates shall not be liable for any direct, indirect, incidental, exemplary or consequential damages arising from users’ use of the app.
Privacy policy. The app T&Cs will often direct users to a hyperlinked privacy policy that provides details regarding the collection, use and disclosure of users’ personally identifiable information. A hyperlink to the privacy policy in the app’s T&Cs notifies users where the privacy policy can be found, and is recommended to give users the opportunity to read the policy prior to downloading the app. Ideally, the T&Cs will state that by accepting the T&Cs users are also agreeing to the terms of the privacy policy.
Proprietary rights. The T&Cs of an app will generally designate the owner of the items featured in the app, including any images, icons, audio clips, software code and trademarks, and confirm that the owner retains all rights, title and interest in those items.
User requirements. These provisions typically consist of a relatively informal section within the T&Cs where the app operator discusses its policies toward the use of the app by minors or in a corporate environment, any fees for the app or premium features and the app’s compatibility with users’ devices and operating systems.
Writing Plain-Language Terms and Conditions for Users
With the free and, in some cases, irrelevant boilerplate being used for Terms and Conditions, it’s no surprise that many users don’t understand what obligations and restrictions are placed on them. Users are expected to know their Terms and Conditions and by accepting them are agreeing that they have read and understood the Terms and Conditions. This is often overlooked by users and as a result leads to non-compliance. Users read Terms and Conditions when they first install an app and are not likely to revisit those terms after the fact. Further, legislation in several jurisdictions, such as the European Union’s Consumer Rights Directive 2013, requires that Terms and Conditions be "clearly expressed" or "plain and intelligible." It is important, therefore, to use plain language in drafting Terms and Conditions wherever possible.
Examples of poor phrasing and phrases that are more easily understood include:
Tailoring Terms and Conditions to Different Mobile App Types
Customizing Apps by Type: Tailoring Terms and Conditions for Gaming, E-Commerce and Social Networking Apps
As app developers continue to launch successful apps worldwide, the need to draft tailored terms and conditions for those apps is becoming increasingly important. In addition to disclosing the learning curve and rules of gaming apps, e-commerce apps must determine how digital goods will be governed with terms and conditions. Social networking apps need to deal with various potential liabilities. As outlined below, the type of app developed and the potential liabilities in operating that app dictate the way a developer should consider drafting its terms and conditions.
The rules regarding the monetization of gaming apps vary from country to country, but the bulk of developed countries have mandatory rules. For example, France has a number of regulations regarding gaming apps that require, amongst other things, developers to ensure that players over the age of 18 and that minors be able to request that they be blocked from playing. France has special rules regarding the monetization of such gaming apps (in particular regarding the prohibition of detrimental advertising applicable to gambling apps) that impose strict standards on the protection of minors. Fines for non-compliance with these regulations can range from EUR 75,000.00 to EUR 200,000.00.
As mentioned above, developers of e-commerce apps should determine how digital goods will be governed with terms and conditions; this is an area often overlooked by developers of e-commerce apps. Digital goods such as pre-paid value cards, virtual coins and in-app currencies are often used to facilitate the purchase of downloadable content from gaming or other apps. All digital goods must comply with the general consumer protection rules applicable in each country where they are offered. In addition, the applicable local sectoral rules may impose additional specific rules regarding e-commerce and online sale of digital goods. For example, under Italian law, a company willing to distribute digital games to Italian consumers through e-commerce distributions must grant adequate information to consumers and inform them of the existence of a 14-day right of withdrawal.
Social networking apps are also required to address many of the issues described above. In addition, social networking apps have varied and unique potential liabilities that need to be covered in terms and conditions, including: harassment issues, protection of minors, data protection or privacy issues, and intellectual property issues.
Handling Changes and Revisions to the Terms and Conditions
When modifying or adding to terms and conditions, it is essential the entity behind the mobile application carefully considers whether notice of the change should be provided to users, and whether their consent should be obtained. It is recommended that companies provide such notice when terms are changed, especially when the changes substantially affect users’ rights. Providing clear notice of changes will also help to avoid any potential confusion for end-users who have already entered into forms of binding agreements with the company . Examples of some circumstances in which notice should be given to mobile app users for terms and conditions amendments include: Email forms of notice are preferred as they can be easily documented and referenced for legal support or evidence purposes later on. For mobile app users who have entered into binding terms via a clickwrap, all that may be required is to display notice of the changes to the terms required for consent (i.e., ‘Accept’, ‘I Agree’, etc.). Notice provisions are particularly important when significant or potentially controversial changes to terms are made (e.g., liability waivers, dispute resolution provisions, privacy policies, and billing terms or subscription clauses).
Staying in Line with the Law
For developers to comply with their legal obligations in the use of data and the delivery of services through their apps, terms and conditions will need to be consistent with relevant laws such as GDPR. This is true of the GDPR’s ‘lawfulness of processing’ principles which requires, broadly speaking, that data processors and controllers shall process personal data only when such processing is permitted by law.
In particular, it is advisable for developers to ensure that when collecting data from users of their apps, they do so on a lawful basis as set out in the GDPR (Article 6) – by way of the user’s consent, for example. In ensuring that ads and other content are personalised for users, the app may fall under the GDPR’s definition of ‘profiling’, where an individual’s data is used to create a profile of that individual’s preferences or view points, and delivered to a different individual based on that profile. Personalised ads may even fall under the GDPR’s definition of ‘automated decisions’, where a decision is made about an individual relating to their potential performance at work, their contract of employment, etc, without human being intervening. Developers should be aware of their responsibilities when living up to the GDPR’s requirements in relation to profiling and automated decisions.
Sample Terms and Conditions Template
Terms and conditions for mobile apps are divided into legal and non-legal text. The legal text covers a variety of matters discussed in this post, such as: the governing law, choice of law and forum, warranties, disclaimers, exclusion of liability, indemnity, circumscribing the app store terms of service, acceptable use provisions, limitation of liability, arbitration, class action waivers, etc. The non legal text deals with usability, functionality, the app itself, and general policy.
Below is a sample framework that deals with the non-legal text aspects of terms and conditions. Respective sections may or may not apply to your business.
- Just need to enter your app title, company name and logo, version, contact details or mobile number, activity logs or terms, and accessibility settings.
- Just need to enter your name, company name, address, contact telephone number, fax and email.
- Users must be at least 13 years of age.
- Consequences and sanction for registration or login misuse and abuse.
- Clarify how users can unsubscribe from newsletters or other material.
- Identification of third-party content.
- Description of services and products including pricing.
- Statement specifying that users must comply with all relevant laws, rules and regulations.
- Exclusivity and copyright statement.
- Identification of results of misuse, abuse or disruption of service.
- App usage including responsibility for use and protecting of passwords.
- A statement that no transmission is guaranteed to be secure and users should take precautions.
- A statement that the app is available as-is and may not contain all features as presented, and the developers have no liability for damages or losses caused by errors.
- A statement that users can be charged for use, so nothing will be free forever.
- A statement that the app may link to third-party sites and that the user is solely responsible for use of those sites.
- Consents for use of personal information.
- Notification of privacy policies and any amendments to same.
- Clarification of ownership of intellectual property.
Conclusion: Tips for Drafting Terms and Conditions
To conclude, the above must-know areas make the creation of your terms and conditions a vital exercise. Likewise, integrating the above recommendations with the elements in a traditional user agreement can strengthen the enforceability of the terms. With that in mind, it’s best to tackle the development of the terms and conditions in an organized, deliberate manner by: (1) doing the requisite research on the applicable laws and regulations (including seeking legal assistance); (2) crafting the terms (including addressing your advertising, privacy, and mobile payment policies); and (3) incorporating the terms into your app, offering mechanism, and/or distribution platform (e.g . , through a "click-to-accept" user interface). Careful attention to these activities also will help you create your app with an eye towards avoiding costly mistakes. Always bear in mind that the approach to the terms and conditions should be unique for each app to ensure you are following the correct process and addressing all of the anticipated provisions. You would not, for example, follow the same approach for the terms for a casual mobile game app as for an app with a complicated payment function. Whatever your app, an experienced legal adviser can provide both broad guidance and specific advice in order to help you avoid liability related to the terms and conditions for apps.