Managing Risk through Online Terms of Use

The Web 2.0 era is characterised by the fundamental shift in how people interact with information. No longer does information flow in one direction – opportunities now exist for the consumer of information services to contribute, provide feed back, criticise, or determine if the content is newsworthy. This high level of interaction is typically considered to be positive.

However, as with anything, when engaging in such activities you should be mindful of the potential risks that come along with it – and this is doubly true for hosts of content or webmasters. In addition to considering if content is potentially defamatory, or libellous, one must also consider issues such as copyright, privacy, and control.

If you are a webmaster or a service provider or some sort, these risks can often be managed by a combination of:

  • having a clear and effective Terms of Use;
  • actively policing your user base for breaches of the terms; and
  • having policies in place on dealing with complaints.

In addition to being able to assist in managing your risks, by having clear and effective Terms of Use, you are able to manage your users more effectively. Note that just having a Terms of Use may not be sufficient to protect you – your risk management strategy should consist of both legal and non-legal measures. In addition to this, a Terms of Use has to be effective towards whatever service you are providing. There is no point in going with a standard Terms of Use if the terms contained within are not particular to the type of service that you provide.

While you can draft a Terms of Use by yourself, it is always advised that you should seek legal advice in doing so. A solicitor can identify issues that you may not have previously considered and can generally add value to the entire process.

Author: Kenneth Ti

Kenneth Ti is an Associate Solicitor with Phang Legal and a graduate from the University of New South Wales. He is focused on providing services to small and medium sized businesses. He has a background in civil and commercial law. Kenneth is a strong believer in community services and pro bono work.