The Importance of Terms of Use for Your Online Course or Membership: 5 Reasons Why Your Business Needs Them!
INTRODUCTION
Online courses are a powerful tool to reach more of your ideal clients and share your knowledge in a cost-friendly manner while still providing incredibly valuable education to your clients. We know first-hand how much work goes into developing a course, and we want you to be best positioned to protect your course and grow your business through it.
COMMON PITFALLS OF CONTENT CREATORS WHO DO NOT HAVE ATTORNEY-DRAFTED TERMS OF USE
While courses can be such a wonderful tool for your clients, there are also risks inherent in the online course model. The following are some of the consequences we have seen happen to business owners that haven’t properly protected their courses through attorney-drafted Terms of Use:
- Unwarranted Refund Requests
- Unauthorized Sharing of Content/Passwords Amongst friends, colleagues, and family members (i.e., freeloaders)
- Copycats Stealing Your Content and Selling it as Their Own
- Unwarranted Chargebacks to Credit Card Companies
- Unlimited Liability
In this blog post, we walk through these risks and the ways that well-drafted Terms of Use can alleviate these potential issues.
PROTECTION AGAINST UNWARRANTED REFUND REQUESTS
One reason that incorporating attorney-drafted Terms of Use into your sale process for courses is so important is that it allows you to protect against unwarranted refund requests.
The Terms of Use will allow you to set forth a clear policy around your refunds. This can protect you from a customer that buys your course, downloads all of the information and enjoys the benefit of all of this information, and then seeks a refund from you for no reason other than to get their money back. And, since they can’t ever return the knowledge you gave them, you are essentially without recourse. Having an airtight Terms of Use contract in place lets you set forth your own refund policy so that you are setting the rules for what refund policy is acceptable for you and your business.
STOP THE SHARING OF PASSWORDS AMONGST THOSE WHO HAVEN’T PAID
The growth of your business often depends on your ability to scale your sale of courses. We know first hand that developing a course takes an immense amount of hard work on the front end, and the ability for you to keep creating quality content at customer friendly prices is dependent on customers purchasing the courses with honesty and not sharing passwords with every friend, colleague, and family member they know.
Terms of Use provide the perfect avenue to outline your policy around sharing of passwords, and to remind your customers that the course they purchased is for their individual use only. Terms of Use also allow you an avenue to retain your rights to terminate continued access to your course and products if you discover evidence that a customer has ever violated your policy on sharing of passwords.
SHUT DOWN COPYCATS STEALING YOUR CONTENT AND RE-SELLING IT AS THEIR OWN
Terms of Use allow you to make it clear that your course content is your intellectual property, and the rights to it belong to you. In your Terms of Use, you can make it clear that the buyer is only purchasing a limited license to use the contact for their own personal use but that they cannot share it with others or re-sell to others. By making these terms clear in your Terms of Use, it will give you a much stronger legal leg to stand on if you ever have to enforce your rights against a potential copycat out there who tries to take your work product and sell it as their own.
HALT UNWARRANTED CHARGEBACKS
There is no doubt about it… unwarranted credit card chargebacks and “friendly fraud” are on the rise. In your Terms of Use, you can create a contractual obligation for your customers to use their best efforts to achieve a refund of any refundable purchases through you prior to initiating a chargeback request. You can also require your customers to agree that they will relinquish all rights to continued access to any courses, programs, or memberships they purchase from you in the event they initiate any chargeback. The Terms of Use also provide you with an avenue to put your customers on notice that you will dispute any fraudulent or unwarranted chargebacks. All of these measures should operate to cutdown on your risk of unwarranted chargebacks.
LIMIT YOUR LIABILITY
Did you know you can limit your liability to your customers in your Terms of Use? In your Terms of Use, you can specify the exact liability that you will have to your customers. Typically, we provide in our template documents that you will not be liable for any losses arising from your customer’s use of any course or product. Further, we provide that in the event the client tries to sue you, that they must pursue any claims against you through arbitration (to save you legal fees!) and we also provide that their recovery in any arbitration would be limited to a return of the fees the customer paid to you. This means that your otherwise open-ended liability is completely capped, and this puts you in a much stronger position from a liability perspective. Not to mention… if a customer knows that their best recovery is simply a return of their fees paid, they are much less likely to spend their own time and money on a lawyer when they know their potential recovery is so limited that it wouldn’t be worth it.
CONCLUSION
If you offer an online course, program, membership, or product, we hope this article has demonstrated that you that you really can’t afford not to have Terms of Use for your offering. We have you covered on this need with Terms of Use available in our template shop that you can be fully confident in – drafted by two attorneys with over 2 decades of experience who are entrepreneurs and course creators themselves. Download our DIY Terms of Use template and have your course or membership protected in mere minutes.
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ALTHOUGH KELLY AND KRISTIN ARE LICENSED ATTORNEYS IN THE STATE OF TEXAS, NEITHER THEY NOR DOTTED LINES CO.. LLC ARE YOUR ATTORNEY, NEITHER THEY NOR DOTTED LINES CO., LLC HAS AN ATTORNEY-CLIENT RELATIONSHIP WITH YOU, AND NEITHER THEY NOR DOTTED LINES CO, LLC KNOWS YOUR BUSINESS. THE INFORMATION IN THIS POST IS NOT TO BE CONSIDERED LEGAL ADVICE, AND YOU SHOULD NOT CONSIDER IT A SUBSTITUTE FOR LEGAL ADVICE. WE ALWAYS RECOMMEND CONSULTING WITH AN ATTORNEY IN YOUR LOCAL JURISDICTION SINCE THEY WILL BE ABLE TO ADVISE YOU AS TO YOUR PARTICULAR SITUATION AND ALSO PROVIDE YOU WITH INFORMATION SURROUNDING ANY NUANCES OF YOUR LOCAL LAWS THAT WE SIMPLY CANNOT ADDRESS IN THIS POST. FURTHER, WE DO NOT GUARANTEE ANY SPECIFIC RESULTS.
