Are Terms & Conditions Agreements Protected by Copyright Law?

You might think it makes sense to take content from another company's Terms and Conditions agreement instead of writing your own. You'd be very wrong. Doing so can breach copyright and cost you money, time and reputation as you deal with a legal complaint.

Not creating your own unique Terms and Conditions agreements is a terrible idea for several other reasons that we'll explore. Here's what you need to know and some better options for what to do.

Copyright For Terms & Conditions Agreements

Simply put, using the Terms & Conditions agreements of others will usually violate copyright law, contrary to many common myths. We've concentrated on U.S. law in this guide, but the broad principles are the same in most laws around the world.

Let's break it down.

Copyright Explained

The U.S. Copyright Office has a simple definition of copyright:

"...a type of intellectual property that protects original works of authorship as soon as an author fixes the work in a tangible form of expression."

When you hear "works of authorship," you might well think of a book, particularly a novel. However, this actually covers anything you can create, including a Terms and Conditions agreement. A "tangible form of expression" means it exists in a form that can be used, kept and recreated, such as a written document.

Another way to understand it is that you can't copyright an idea, but you can copyright the way you express that idea. So, copyright can't cover the specific wording of a clause in your Terms & Conditions agreement that explains and sets out that ban.

It's possible a court could hold that not all elements of a particular Terms & Conditions agreement are covered by copyright. This would usually be the case if they are not suitably original, for example if they quote directly from legislation, or if they use common legal wording that has an established meaning.

However, the particular combination of wording across the entire document is covered by copyright and there's no sure way to know you are "safe" to use the document as your own.

Registration of Copyright for Terms & Conditions Agreements

When you look at another company's Terms & Conditions agreement, you'll rarely see a copyright notice. It's even rarer you'll find a record of the Terms & Conditions agreement at the U.S. Copyright Office or another country's equivalent.

However, this doesn't change the fact that the Terms & Conditions agreement is covered by copyright. That's because copyright automatically exists as soon as a document is written. Registering the copyright is simply an optional step to:

• Make it easier to enforce in courts (it's usually a requirement for federal court action)
• Increase the potential damages in a lawsuit (it makes it possible to claim legal fees and statutory damages, rather than just covering provable financial losses)

You could still face legal action over violating copyright that hasn't been registered. You could still have to spend time and money defending yourself. You could suffer public embarrassment and reputational harm when people found out you infringed copyright. And, most of all, breaking the law this way is simply the wrong thing to do, regardless of the consequences.

Exemptions to Copyright Law

Although exemptions to copyright law exist, they likely won't apply when you take and use another company's Terms & Conditions agreement.

The main exemption is a concept known as "Fair Use" which lets you use parts of a copyrighted document in specific ways without breaching copyright. Broadly these uses should be transformative, meaning you:

• Change the content in some way (for example, a music remix)
• Use only a short extract from the original
• Use it for a substantially different purpose to the original
• Some combination of these factors

Common "fair use scenarios" include commentary, analysis, news reporting, parody and quotations to illustrate a point.

For example, in guides such as this, we often use screenshots of web pages and other documents to illustrate a particular legal requirement. This comes under fair use because it is a short extract, used for a different purpose to the original.

Here's Harvard University's explanation of the four key factors that decides what counts as fair use:

Taking another company's Terms & Conditions agreement and using it for your own legal relationship with customers clearly does not come under fair use.

Other Reasons to Not Use Someone Else's Terms & Conditions Agreements

Even leaving aside the copyright implications, using another company's Terms & Conditions agreement is a bad idea. Here are just a few reasons why.

Incorrect Terms & Conditions

You have no guarantee the other company's Terms & Conditions agreement is accurate, valid or practical. For all you know, the other company may have written them badly or even copied them from another source themselves. This is not a risk you can take with your own business.

The entire point of writing a Terms & Conditions agreement is to protect you in the event of a dispute, so you need to be confident your agreement is correct.

Inappropriate Terms & Conditions

If you use someone else's Terms & Conditions agreement, you may be using clauses that are inappropriate or irrelevant to your business. This can cause significant confusion and distract from the points that are relevant and important.

For example, Freelancer gives a useful and effective list of circumstances in which it may close or suspend a user account:

However, the same wording would be irrelevant on a website that didn't have user accounts (for example for posting material or accessing member sections). It would simply create confusion and raise questions about whether you had taken care in developing your Terms and Conditions agreement.

Incomplete Terms & Conditions

There's no guarantee another company's Terms and Conditions agreement will be sufficient to cover everything you need to protect your specific business and set-up.

As an example, let's imagine the reverse of the scenario we just mentioned. This time, imagine you run a website with a members-only forum that requires users to create an account to post.

You then take and use a Terms & Conditions agreement from a website that doesn't have user accounts and thus has no clause about terminating accounts. If you then ban a user for posting offensive material, the user may complain there was nothing in the Terms & Conditions agreement giving you the right to do this. This could easily wind up in a legal dispute.

Unlawful Terms & Conditions

In extreme cases, the Terms & Conditions agreement you use could be unlawful in your circumstances. For example, this refund clause from Indian company Breeur is completely lawful to use in India as long as the customer can see it before making a purchase:

However, taking this clause and using it in the United Kingdom and Australia would be unlawful. Not only do these countries have laws which mandate refunds in some circumstances, but it is a criminal offense in those countries to mislead people about their legal rights.

Alternatives to Using Terms & Conditions Agreements That Aren't Your Own

Here are several other ways to create Terms & Conditions agreements other than taking them from another company. Each has its pros and cons.

Write the Terms & Conditions Agreement Yourself

This is possible if you not only know exactly what you want (and need) to cover in such a document, but also the legally valid way to write each clause to make it clear but effective. If this isn't the case, you risk overlooking something, making something ambiguous, or otherwise not fully protecting yourself.

Get an In-House Lawyer to Write the Terms & Conditions Agreements

This can be a cost-effective way to get a valid set of clauses from somebody who knows your business and who you are already paying. However, not all in-house lawyers are experts on writing Terms & Conditions agreements. You may also need to check your in-house lawyer is familiar with all the laws that apply to your business around the world.

For example, if you run a retail store in the U.S., you may have an email newsletter that people can subscribe to on your website. Your in-house lawyer may have a great knowledge of the federal and state consumer and contract laws that affect the store and won't usually need to know about any laws in other countries.

However, your newsletter signup could mean you need to comply with data protection laws in other countries. Your Terms & Conditions agreement may need to address this situation.

Hire A Lawyer to Write the Terms & Conditions Agreements

This can be the most effective solution, particularly if you can find a lawyer who understands consumer contract laws and is familiar with the specific needs of your industry (or is willing to take the time to find out). The downside is that such lawyers, with specialist expertise, can be expensive.

Use a Terms & Conditions Agreement Generator

This is often a good way to combine cost and effectiveness.

A good document generator will go through all potentially relevant points for your business and set-up, including issues you may not have thought about. It will then create a document using the right combination of legally valid and effective wording for your situation. You will have the full legal right to use the generated Terms & Conditions agreement, meaning there's no risk of copyright infringement.

Summary

Taking a Terms & Conditions agreement from another company directly violates copyright laws. It is not protected by fair use exemptions and it does not matter whether the other company has formally claimed or registered copyright.

Using a copied agreement could also mean you are not properly protected or that you inadvertently mislead people about their rights.

Instead, you should always write your own Terms & Conditions agreement, covering your specific needs and situation. This can be easier with the help of a lawyer or a policy generator service.