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Are Terms of Service and Privacy Policies necessary for your website or app? Yes. Here is Reason #5: TO LIMIT YOUR LIABILITY. Your Terms of Service (TOS) policy & your posted Privacy Policy should enable you to limit your liability in at least 4 ways: 1. Disclaim your liability for third party (including open source) products and services featured on, or linked to or from, your site/app. Many sites and apps include a mix of your own content and tools, plus open source materials, plus other third party content, services and APIs. You only want to be responsible for the portion of the tools and content you control and supply directly. You do not want to be liable for other people’s mistakes (such as if their materials infringe a third party’s rights). ? 2. Disclaim your liability for users who allege that their poor decisions are the result of your content or data. People do lots of stupid things. You do not want to be responsible for bad decisions your end users make, even if based on your data. Does this sound like it can’t happen? It happens all the time. People argue “this website told me to do X” – often when it did not really say that, or when it said that applies in SOME circumstances. For example, if your app gives stock market data, and the user makes a poor investment decision based on that data, you are not responsible for their losses. Believe me, they will try to argue that you should be liable, even though you shouldn’t be, unless you disclaim this responsibility. 3. Cap your liability. If you are sued by an end user, you want to limit your maximum exposure. End users could try to sue you for large amounts, even if frivolous, under the theory that even if they’re unlikely to win, the potential benefit is worth the cost. You want to put an absolute cap on the most anyone can try to sue you for, to discourage such frivolous suits. 4. You want polices that leverage any applicable “safe-harbors” (for example, publishers are generally not liable for things other people say on their site or app). Some “boilerplate” disclosures are there to allow you maximum protection under the law. But they have to be worded properly to be effective. Limiting your liability is just one of at least 8 reasons you need a good TOS and Privacy Policy. And good policies limit your liability in at least 4 ways. To see all 8 reasons why you need a good TOS and PP for every website and app, read the entire blog post. The link is in the first comment below.

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