What you need to know about Terms of Service and Privacy policies
Author: Samuel Michaels, JD
In Ontario, a Terms of Service must adhere to the minimum standards of the Consumer Protection Act (CPA) and the Personal Information Protection and Electronic Documents Act (PIPEDA). The CPA protects customers from faulty goods, misrepresentation, and delayed deliveries, among other protections. PIPEDA, on the other hand, deals specifically with the collection and storage of personal information online.
A Terms of Service can set out specific requirements for your business and customers, subject to the CPA and PIPEDA. The Terms of Service can include clauses regarding payment processing, limiting liability exposure, and protecting access to intellectual property. Without a Terms of Service, the business will have to rely on the default rules in the CPA and PIPEDA. However, the CPA and PIPEDA were designed to protect customers, not sellers. In order for the seller to protect themselves, their business will often rely on a Terms of Service in cases of customer disputes or complaints.
Usually, a Terms of Service will be broken down into sections and clauses. The language in a Terms of Service should be clear and concise, and not overburdened with legalese. Over the past few years, especially, national and international institutions (most notably the European Union) have pressured online businesses to ensure their Terms of Service documents are clear and legible for readers.
Companies that conduct online business internationally should also take into account privacy legislation in their customers’ jurisdictions. Of specific concern, the European Union’s General Data Protection Regulation (GDPR) imposes many requirements on companies with European customers.
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