04 Jun 2015 17:29 IST

What readers and clients need to know about your privacy policy

What is the need is for terms of service and privacy policy?

The first thing you'll do when you start your business is have a website. You may call visitors to it readers, customers or clients, but all of them will need to be told what is being done with the data they provide you with (even if it's only an e-mail address) and what they can and cannot do with the content that's up on your website. These are conveyed through the privacy policy and terms of service, respectively.

Many entrepreneurs are under the impression that these are standard documents that they can simply write themselves. But if you think your business is different, your privacy policy and terms of service will also need to be different. And for this you need legal professionals, who will be able to advise you on what needs to be in these documents, once you explain to them what your business model is. The more complicated your business is – if you're selling customer data, collecting payment online – the more crucial these documents need to be.

What do they do?

The terms-of-service agreement intimates all users of the terms under which they are receiving the service. This document establishes the legal relationship between the user and the website or app owner. Its main purpose is to establish what can and cannot be done with your content. Therefore, it includes the rights and responsibilities of the user, their accountability for their online actions with the data provided on your app or website, and a disclaimer stating your liability in case the user incurs damages on account of the service you are providing.

The Privacy Policy, often seen as part of the aforementioned document, is perhaps more crucial, as it lays down the extent to which you plan to use information your users share on your website or app. It will specify what information you are collecting, whether you use it yourself or sell it to other firms, researchers or sellers. Social media and e-commerce websites must mandatorily maintain these documents on their websites.

Should your business succeed, this document may even be scrutinised by the media (it happened to Instagram, most recently).

What if I don't?

Well, if you are collecting or selling user information, and don't inform your users, they could take legal action. Given that both the terms of service and privacy policy are legally enforceable, they can offer protection – if your users misuse your website and if you sell or forward your users' data in agreement with what was in the privacy policy.

Moreover, users have become more aware of these documents, and prefer disclosure – such as whether or not you may sell their information – to non-disclosure. Therefore, in the interest of your business, these must find room on your website.

Finally, you should also take note of the following:

a. Whenever users are taking any major action, such as making payment or installing software from your website, both documents should be navigable and users should agree to them.

b. Somewhere on your website, there should preferably be an option to print out the terms of service and privacy policy.

c. Once the user agrees, it should still be prominently displayed or easy to locate.

*VakilSearch simplifies legal for start-ups by facilitating company registration , trademark filing , documentation and compliance.