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Terms of Service Agreement

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TERMS OF SERVICE AGREEMENT

This Terms of Service Agreement (Agreement) is made and entered into as of Effective Date: by and between Provider Name: with principal place of business at , and Client Name: with principal place of business at (each a Party and collectively the Parties).

RECITALS

WHEREAS, Provider is in the business of developing, hosting and operating certain software, platforms and related services described herein; and

WHEREAS, Client desires to obtain access to and use Provider's services on the terms and conditions set forth in this Agreement; and

WHEREAS, Provider is willing to provide such services to Client subject to the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS

1.1 "Services" means the software, APIs, hosting, maintenance, support and other deliverables and functionality provided by Provider pursuant to this Agreement and any attached schedules or statements of work.

1.2 "Confidential Information" means non-public information that is designated as confidential or that reasonably should be understood to be confidential, including trade secrets, business and financial information, technical data, product roadmaps, and customer information.

1.3 "User Content" means all data, content, information, and material submitted, uploaded, posted or otherwise provided by Client or Client's users through the Services.

2. PROVISION OF SERVICES

2.1 Provider shall make the Services available to Client in accordance with the terms of this Agreement. Provider reserves the right to modify the Services where such modifications do not materially diminish core functionality, and Provider shall provide notice of material changes in accordance with the Notices section.

2.2 Provider may perform scheduled maintenance and updates. Provider shall use commercially reasonable efforts to minimize disruption to Client's use of the Services and to provide advance notice of scheduled maintenance where practicable.

3. CLIENT OBLIGATIONS

3.1 Client shall: (a) provide accurate account and contact information; (b) use the Services only for lawful purposes and in compliance with all applicable laws; (c) maintain appropriate security controls for its accounts and access credentials; and (d) be responsible for all activity occurring under its accounts.

3.2 Prohibited conduct includes, without limitation, attempting to gain unauthorized access, reverse engineering the Services, introducing malicious code, or using the Services to transmit unlawful material. Provider may suspend access immediately where Client's actions create a security risk, legal exposure, or violation of this Agreement.

4. FEES AND PAYMENT

4.1 Client shall pay all fees specified in an applicable order, invoice, or statement of work. Fees are non-refundable except as otherwise expressly stated in this Agreement.

4.2 Invoices are due within thirty (30) days of invoice date unless otherwise agreed in writing. Overdue amounts shall accrue interest at the lesser of 1.5% per month or the maximum rate permitted by law, and Client shall reimburse Provider for reasonable collection costs, including attorneys' fees.

5. INTELLECTUAL PROPERTY

5.1 All intellectual property rights in the Services, including software, documentation and related technology, are owned by Provider or Provider's licensors. Provider hereby grants Client a limited, non-exclusive, non-transferable, revocable license to use the Services solely in accordance with this Agreement.

5.2 Client retains ownership of User Content. Client grants Provider a worldwide, royalty-free, sublicensable license to host, store, transmit and display User Content as necessary to provide the Services and to improve Provider's offerings, subject to Provider's confidentiality obligations.

6. PRIVACY AND DATA SECURITY

6.1 Provider will maintain reasonable administrative, physical and technical safeguards designed to protect the security of User Content. Provider will promptly notify Client upon becoming aware of a confirmed security breach affecting Client's User Content and will cooperate with Client to investigate and remediate such breach.

6.2 Each Party shall comply with applicable data protection and privacy laws in connection with its processing of personal data.

7. TERM AND TERMINATION

7.1 This Agreement commences on the Effective Date and continues until terminated in accordance with this Section. Either Party may terminate this Agreement for material breach by the other Party that remains uncured thirty (30) days after written notice of such breach.

7.2 Upon termination, Client shall immediately cease use of the Services. Termination shall not relieve Client of any obligation to pay fees accrued prior to termination, nor shall it affect any provision that by its nature survives termination.

8. WARRANTIES; DISCLAIMER

8.1 Each Party represents that it has the legal power to enter into this Agreement. Provider warrants that it will provide the Services in a professional manner consistent with industry standards.

8.2 EXCEPT AS EXPRESSLY PROVIDED IN SECTION 8.1, THE SERVICES ARE PROVIDED "AS IS" AND PROVIDER DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY OR ARISING FROM COURSE OF DEALING, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT.

9. LIMITATION OF LIABILITY

9.1 TO THE MAXIMUM EXTENT PERMITTED BY LAW, IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, INCLUDING LOSS OF PROFITS, REVENUE, DATA OR BUSINESS, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

9.2 EXCEPT FOR EACH PARTY'S INDEMNIFICATION OBLIGATIONS OR BREACHES OF CONFIDENTIALITY, THE AGGREGATE LIABILITY OF PROVIDER FOR ALL CLAIMS ARISING FROM OR RELATED TO THIS AGREEMENT SHALL NOT EXCEED THE FEES PAID BY CLIENT TO PROVIDER DURING THE TWELVE (12) MONTHS PRECEDING THE EVENT GIVING RISE TO LIABILITY.

10. INDEMNIFICATION

10.1 Client shall indemnify, defend and hold harmless Provider and its officers, directors, employees and agents from and against any third-party claims, liabilities, damages and expenses (including reasonable attorneys' fees) arising out of Client's breach of this Agreement, Client's misuse of the Services, or Client's violation of applicable law.

11. CONFIDENTIALITY

11.1 Each Party agrees to protect Confidential Information of the other Party using at least the same standard of care it uses to protect its own confidential information, but in no event less than reasonable care. Confidential Information shall not include information that is or becomes generally available to the public through no breach of this Agreement, was known to the recipient prior to disclosure, or is independently developed without use of the discloser's Confidential Information.

12. NOTICES

Notices shall be in writing and delivered by personal delivery, nationally recognized courier, or certified mail (return receipt requested), and shall be effective upon receipt.

13. AMENDMENTS; WAIVER

13.1 No amendment, modification, or waiver of any provision of this Agreement shall be effective unless in a writing signed by authorized representatives of both Parties. No waiver by either Party of any breach or default shall constitute a waiver of any subsequent breach or default.

14. ASSIGNMENT

Neither Party may assign this Agreement without the prior written consent of the other Party, except that Provider may assign to an affiliate or in connection with a merger, acquisition or sale of substantially all of its assets, provided that the assignee assumes Provider's obligations hereunder.

15. FORCE MAJEURE

Neither Party shall be liable for delay or failure to perform due to causes beyond its reasonable control, including acts of God, governmental action, labor disputes, failures of third party services, or Internet disturbances, provided that the affected Party uses commercially reasonable efforts to resume performance.

16. ENTIRE AGREEMENT; SEVERABILITY; GOVERNING LAW; COUNTERPARTS

16.1 This Agreement (including any exhibits, schedules and statements of work) constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral.

16.2 If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions will remain in full force and effect and the Parties will negotiate in good faith to replace the invalid or unenforceable provision with a valid and enforceable provision that achieves, to the extent possible, the original intent.

16.3 This Agreement shall be governed by and construed in accordance with the laws of the state specified below without regard to its conflict of laws principles. The Parties submit to the exclusive jurisdiction of the courts located in the selected jurisdiction for disputes arising out of this Agreement.

17. ADDITIONAL TERMS

Provider

Printed Name:

By:

Date:

Client

Printed Name:

By:

Date:

Enter text✕

What a Terms of Service Agreement Is and When It Applies

A Terms of Service Agreement (Terms of Service Agreement) is a written contract that sets the legal relationship between a service provider and users or customers. It defines permitted uses, payment terms, liability limits, intellectual property rights, dispute resolution procedures, and termination rules. Well‑drafted terms allocate risk, establish expectations for data handling and privacy, and specify the governing law and venue. For many online services, eSignature and electronic delivery satisfy statutory requirements for validity under federal ESIGN and state UETA frameworks, provided the four legal validity elements are met.

Why a Clear Terms of Service Agreement Matters

A precise Terms of Service Agreement reduces disputes, clarifies responsibilities, and helps protect intellectual property and confidential data while making enforcement more straightforward under ESIGN and UETA.

Why a Clear Terms of Service Agreement Matters

Who Typically Drafts and Signs Terms of Service Agreements

Organizations and individuals use Terms of Service Agreements to document service rules and protect legal rights. Below are common user profiles.

  • SaaS Providers and Platform Owners — Use standardized terms to control usage, limit liability, and define subscription billing and termination processes.
  • Small Business Owners and Freelancers — Use concise terms to set payment schedules, deliverables, IP ownership, and dispute resolution without unnecessary legalese.
  • Enterprises and Legal Teams — Deploy modular, negotiable terms with exhibits for SLAs, data processing addenda, and reseller or partner clauses.

Tailor the agreement language and signature authority to the profile and applicable industry rules.

Typical Signers and Their Roles

General Counsel

Legal lead who reviews draft language for enforceability, recommends jurisdiction and limitation of liability clauses, and ensures consumer disclosures meet ESIGN requirements when customers consent electronically.

Authorized Officer

An executive or manager with delegated contract authority who signs to bind the business; verify corporate authority and signatory limits before acceptance.

Core Clauses to Include in Professional Terms of Service Agreements

A complete Terms of Service Agreement organizes the relationship into discrete, enforceable clauses and ancillary exhibits so each party knows obligations, limits, and remedies.

Scope of Service

Describe the services provided, deliverables, and any excluded activities so there is no ambiguity about provider obligations and customer expectations.

Payment Terms

Set pricing, invoicing cadence, late fees, and refund policies. Specify currency, taxes, and any automated renewal or subscription autorenew mechanics.

Intellectual Property

Allocate ownership of preexisting IP, deliverables, and license grants. Include obligations for third‑party components and open source licensing where applicable.

Data and Privacy

State what data is collected, how it is used, retention rules, security standards, and applicable privacy law compliance (HIPAA, CCPA) if relevant.

Limitations of Liability

Define caps on damages, disclaimers for indirect loss, and exceptions for gross negligence or willful misconduct to manage financial exposure.

Termination & Remedies

Identify termination events, notice periods, post‑termination obligations (data return/deletion), and available equitable or monetary remedies.

Stepwise Process to Complete and Execute the Agreement

Follow this sequence to prepare, review, and finalize the Terms of Service Agreement with clear roles and electronic execution steps.

  • 01
    Draft: Populate template fields and attach exhibits or DPA as needed.
  • 02
    Internal Review: Legal and finance validate terms, payment, and risk tolerances.
  • 03
    Signatory Approval: Verify signing authority and capture approvals in the record.
  • 04
    Electronic Execution: Send for eSignature, capture audit trail, and distribute executed copies.

How Electronic Signing Typically Works for This Agreement

Electronic signing streamlines execution. The following stages show a typical sender-and-signer flow with audit trail capture.

  • Upload Document: Store the final draft in PDF or DOCX for consistent display.
  • Place Fields: Add signature, date, and initial fields with required validations.
  • Add Signers: Assign roles and sequence; include authentication method.
  • Send and Complete: Signers receive link, authenticate, sign, and obtain completed copy.

Digital Workflow Settings to Configure Before Sending

Configure workflow options to match your review and approval process and to meet compliance requirements for identity and retention.

Field Configuration
Signer Order Sequential or parallel signing based on required approvals
Authentication Email link, SMS code, or knowledge‑based verification
Audit Trail Capture IP, timestamp, and action history for all signers
Retention Setting Enable document retention and exportable certificate of completion

Technical Considerations for eSigning and eSubmission

Confirm platform compatibility, authentication strength, and file formats before initiating electronic signature workflows.

  • Formats: PDF, DOCX, HTML supported
  • Integrations: CRM, ERP, cloud storage connectors
  • Security: TLS in transit and AES‑256 at rest

Key Dates and Notice Periods to Include

Define effective timing and notice obligations clearly so parties know when rights start, when renewals occur, and how termination notices operate.

Effective Date:

Date obligations commence; use MM/DD/YYYY format

Term Length:

Specify fixed term or ongoing subscription with renewal mechanics

Renewal Notice:

State advance notice period required to cancel auto‑renewal

Termination Notice:

Contractual notice period for material breach or convenience

Data Retention Start:

Date from which post‑termination retention periods run

Common Pitfalls to Avoid When Preparing Terms

  • Using vague scope language that allows broad interpretation and increases dispute risk; be specific about deliverables and exclusions.
  • Failing to align the signature block with signatory authority, which can render the agreement unenforceable against the entity.
  • Omitting consumer electronic consent language where ESIGN requires it for consumer-facing transactions, creating enforceability uncertainty.
  • Forgetting to attach data processing addenda when handling protected health or personal data, risking HIPAA or privacy noncompliance.

Consequences of Incomplete or Incorrect Agreements

Enforceability Risk: Invalid signature evidence
Regulatory Exposure: HIPAA breach penalties
Tax Consequences: Incorrect reporting penalties
Contract Liability: Unlimited damages exposure
Data Loss: Failure to meet retention rules
Reputational Harm: Customer trust erosion

eSignature Vendor Pricing and Capability Snapshot

Compare core pricing and capability signals relevant to executing Terms of Service Agreements; signNow appears first per vendor ordering rules.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial Yes, 7-day trial Yes Yes Yes Yes
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Real-world Examples of Terms Use Across Organizations

The following short case arcs illustrate practical, non-promotional scenarios where Terms of Service Agreements were applied.

Optica Ventures — User Agreement

Optica standardized its Terms of Service Agreement across product lines to reduce review time.

  • The team used modular exhibits for data processing.
  • Standardization reduced negotiation cycles and clarified breach remedies for customers and internal stakeholders, improving turnaround without altering core commercial terms.

Martin Properties — Tenant Portal Terms

Martin Properties added an online Terms of Service Agreement for tenant portal access.

  • The clause limited portal liability and defined permitted uses.
  • Having clear online terms simplified dispute handling and enabled secure eSigning of ancillary service orders while preserving landlord protections.

Practical Tips for Accurate and Efficient Completion

Adopt consistent drafting and execution practices to reduce errors, support enforceability, and speed processing.

Use Standardized Templates
Maintain a master template with approved clauses and exhibits to reduce legal review time and ensure consistent risk allocation across agreements.
Verify Signatory Authority
Confirm that the signer is authorized to bind the organization; record board resolutions or delegated authority when appropriate.
Include Electronic Consent
For consumer‑facing transactions, include ESIGN consumer disclosure and methods for withdrawing consent to meet 15 U.S.C. §7001 requirements.
Capture Audit Evidence
Preserve an unalterable audit trail that records timestamps, IP addresses, and actions to support attribution and integrity.

Frequently Asked Questions About Terms of Service Agreements

Answers to common execution and enforceability questions for Terms of Service Agreements, with a focus on electronic completion and compliance.


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