Public Knowledge has highlighted a number of instances (most notably, instances involving Twitter and Adobe) in which e-commerce companies have failed to undertake the analysis and thoughtful drafting required to develop customized Terms of Use and, instead, used generalized terms or simply "borrowed" the Terms of Use posted at another company's website. Unfortunately, it's a trend we've observed for some time.
Even sophisticated companies are tempted to reduce legal expenses by simply copying (or modifying) the Terms of Use applicable to the website of a competitor or other similar business. In the end, the practice usually ends up being another example of being "penny wise" and "pound foolish." Sidestepping the relatively inexpensive task of drafting customized Terms of Use often forces the company to spend large sums of money repairing a damaged relationship with its customers or, worse still, defending a lawsuit.
Drafting Terms of Use applicable to most e-commerce companies is not usually an expensive proposition. Many attorneys who regularly prepare such terms do so on a "flat fee" basis for small companies and startups, so that the client can tell, at the outset, exactly how much the work will cost.
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Great post, Jonathan. It always amazes me when people try to use a cookie-cutter approach and are later surprised to discover that their situation doesn't match the one they copied from. They do so at their own risk when, as you point out, help can be obtained at a reasonable cost. And, without the embarrassment companies like Twitter and Adobe have faced.
Posted by: Kevin Thompson | June 03, 2008 at 06:23 PM
I almost can't believe that such large companies like twitter and adobe has done such a thing. Interesting. I actually didn't know that this was against the law. I can see how many would think they could just copy and paste. I also don't understand why anyone would be up in arms about someone copying there tos. It's TOS. Why is that such a big deal?
Posted by: Deb George | June 15, 2008 at 10:17 AM