Why Your Terms of Service Won’t Protect You

Last week, I reflected on how good things takes time. Growth, content creation, networking - it all happens step by step.

You can’t rush results. But while patience is key in business, one thing you shouldn’t wait on is making sure your Terms of Service actually protect you.

Let’s say you run a SaaS or Fintech platform. You’ve spent hours crafting the perfect Terms of Service (TOS).

It’s thorough, it’s airtight, and it covers every possible scenario - from data breaches to payment disputes.

But the problem is your TOS is only as good as the agreement behind it. If your customers haven’t legally agreed to your terms, those terms are worthless.

And if your TOS is buried in a footer or hidden behind a vague link, the courts won’t back you when things go wrong.

I’ve seen founders lose lawsuits, pay hefty fines, and even shut down their platforms - all because they assumed their TOS would protect them. Don’t let that happen to you.

So let me share with you what you can do to make it better.

Why This Matters: The Cost of Poor Implementation

Let’s say a customer violates your fair-use policy. You suspend their account, and they respond with a lawsuit claiming, “I never agreed to these terms.”

You check your site. Your TOS is tucked away in the footer, or maybe there was a link during sign-up - but no checkbox, no explicit agreement.

Guess what? You lose.

Courts have consistently ruled against businesses with poorly implemented TOS.

If customers don’t actively agree to your terms, those terms might as well not exist. Here’s how I suggest you can make sure your TOS actually protects you.

1. Use Clickwrap Agreements (Not Just Links)

A clickwrap agreement is a checkbox that says something like, “I agree to the Terms of Service.” It’s simple, but it’s legally binding.

Without a checkbox, customers can argue they never saw or agreed to your terms. A clickwrap forces them to actively consent, which holds up in court.

How I suggest you do it:

Add a checkbox during sign-up, checkout, or before accessing key features.

Example:

“By checking this box, you agree to our [Terms of Service] and [Privacy Policy].”

2. Highlight Critical Terms Upfront

Your TOS might be 20 pages long, but customers don’t need to read every word.

What they do need to know are the key terms that affect them - like refund policies, data usage, or account suspension rules.

If customers are surprised by your policies (e.g., “Wait, you don’t offer refunds?”), they’re more likely to dispute them.

Highlighting critical terms upfront reduces misunderstandings and sets clear expectations.

How I suggest you do it:

During sign-up, show a message like:

“By continuing, you agree to our [no-refund policy] and [data usage terms].”

Use tooltips or pop-ups to explain key terms in plain English.

3. Require Re-Consent for Major Updates

If you update your TOS, don’t assume customers will check the new version. Make them agree again.

Courts have ruled that customers aren’t bound by TOS updates they didn’t explicitly agree to.

If you don’t get re-consent, your updated terms might not hold up.

How I suggest you do it:

Send an email:

“We’ve updated our Terms of Service. You must agree to continue using our service.”

Use a pop-up upon login:

“We’ve updated our terms. Click ‘Agree’ to continue.”

Your TOS Implementation Checklist

Finally, here's a quick summary of everything that I covered in today's newsletter for easy reference.

1. Clickwrap agreements: Add checkboxes during sign-up, checkout, or feature access.

2. Highlight key terms: Use pop-ups or tooltips to explain critical policies upfront.

3. Re-consent for updates: Require customers to agree to major TOS changes.

Final Thought: Stop Assuming, Start Protecting

Your TOS is your first line of defense. But if customers haven’t actively agreed to it, you’re not protecting your business; you’re just writing fiction.

Now another thing I suggest is, open your platform and ask: “Would a court agree that customers actively consented to my terms?”

If the answer is no, it’s time to update your TOS implementation.