Do I Need Terms of Service for My Website or App?

Most founders ask this the way they’d ask whether they need a fire extinguisher: is it required, and can I get away without it? That framing is why the answer usually disappoints. Terms of service are not a compliance checkbox you either satisfy or don’t. They are the contract between your business and the people using it — and the real question is not whether you need one, but what yours has to do that a downloaded template was never built to do.

A useful way to tell the difference: your privacy policy is largely about what you must tell people about data. Your terms are about what you and the user each agreed to. They answer different questions and they fail in different ways. We cover the privacy side in depth in is your privacy policy out of date; this post is about the other document.

The Questions That Decide What Yours Must Say

There is no universal set of terms, which is precisely why templates go wrong. What your product actually does determines what the document has to handle. These are the questions worth answering before anyone starts drafting.

Do you take money on a recurring basis?

Subscriptions raise questions a one-time sale does not: how renewal works, what notice you give before charging again, how a customer cancels and what happens to their data when they do, whether you refund partial periods, and how you change pricing for existing customers. Several of these are regulated, and the rules have been tightening — see subscription cancellation compliance.

Do users put content or data into your product?

If they upload, post, or store anything, your terms need to answer who owns it, what licence you have to use it, what happens to it when the account closes, and what you may do if someone uploads something you cannot lawfully host. A document that is silent here is not neutral — it just leaves the question open until it matters.

Does your product use AI?

If an AI feature produces output your customer relies on, your terms should address who owns that output, what you commit to about accuracy, what customers may not use it for, and how responsibility is allocated when the output is wrong. Terms written before the feature existed generally do not. See what your customer contract must say when your product uses AI, and who is liable when an AI agent acts if your product takes actions rather than only answering.

Do your users transact with each other?

A marketplace is not one relationship, it is at least three: you and the buyer, you and the seller, and the buyer and the seller. Your terms have to be clear about which of those you are actually a party to, what you are promising about the other side, who handles payment disputes and refunds, and what happens when a transaction between two users goes wrong. If suppliers or vendors buy tiers or packages from you, that is a further commercial agreement with its own obligations — service levels, listing rights, termination, what they get if you change the tier. Platform terms and supplier terms are usually two documents doing two jobs.

Who bears the risk when something goes wrong?

Warranties, limitations of liability, indemnities and dispute-resolution terms allocate risk between you and your users. Whether a particular allocation holds up depends on the governing law, how the agreement was presented and accepted, the parties, and the use it is sold into. That is a question for counsel reviewing your actual document and your actual product — not something to settle from a template.

How People Agree to Your Terms Is Its Own Decision

Terms only do their job if the people bound by them actually agreed to them. How that agreement is captured — where the link sits, whether the user takes an affirmative step, what you record about it, and how you handle changes to the terms after someone has signed up — is a design decision with legal consequences, and it is worth advice specific to how your product is built.

What Templates Cannot Know

A generic template cannot know that you run a marketplace, that you added an AI feature in March, that you bill annually with auto-renewal, or that your enterprise customers negotiated different terms than your self-serve users. It also cannot tell you when your actual practice has drifted away from what the document says — which is the failure mode that tends to matter most, because the gap between what you promised and what you do is the part that gets read back to you.

Where to Start

Answer the questions above about your own product first; they determine the shape of the document. If you are also sorting out data collection, handle the privacy policy alongside it — the two documents refer to each other and are usually built together. We work with founders and growing companies across Arizona, California and Texas on website terms, privacy policies and disclaimers.