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How to Draw Up Terms and Conditions for a Mobile Application: Tips from IT-lawyers

We all know that no one truly reads the entire terms and conditions when they pop up, but those legal concepts are pivotal to the functioning of a good business. The App Store and Google Play require app developers to create “a safe experience for users” before their app will be approved and published on the platform. One of the measures that must be fulfilled for this requirement is the Terms and conditions. This is how you can protect your business and explain rules for users to satisfy a safe experience. 

We have created a guideline for Terms and conditions development and describe some cases of how our lawyers drew up documents for our client’s mobile games and other types of mobile apps. So, let’s take a look at what clauses you need to include in any Terms and conditions document to ensure the highest level of protection. 

Before we start, we need some clarification. On the internet, you might see different names for “Terms and conditions”, such as “Terms of service for an app”, “Terms and conditions for an app” or “Terms of use for an app”, but all of them mean the same document referenced in this article.  

10 key things to include in your app Terms & Conditions

We have created a list of clauses that must be composed within the Terms and conditions and explain why you need them.

1. The mobile app owner

This clause prescribes who owns a particular software and the intellectual property rights associated with the app in general, who is a party to an agreement, and who earns profit through the monetization of an app. You need it to pass tax and bank compliance as well.

 

2. The moment Terms & Conditions becomes active

This is the moment from which users must follow all rules explained in the document. For example, Smart+Watch Sync app, for whom we drew up Terms of Use, set the condition that rules will be binding on users at once they download, install and first use the app. If they do not agree with provisions, they are not allowed to use the app.

 

3. The app’s functionality

This clause explains an app's features and functions. Reading this provision, users should figure out how an app can be useful for them and what needs will be satisfied through the app. This clause is a tutorial, so it makes their usage easier and more predictable while simultaneously constitutes an official offer, which describes the services you provide. 

Here is an excerpt from our previously mentioned client’s Terms & Conditions. Smart+Watch Sync app allows you to establish a Bluetooth connection between an Android phone and your Smartwatch, and it shows incoming messages on the Smartwatch shield.

For mobile games, except the functionality provision, we often add gameplay explanations. You can find an example below.

The Trivia Quiz IQ Brain mind game by Mioris is an offline game with puzzle elements, where players need to answer questions from various areas of general knowledge. The purpose of this application is ​​to enable the players to test their knowledge and mindset skills by answering questions from various fields. Game process includes such steps and opportunities:

  1. A player gets access to step-by-step levels, namely "cards", which have its theme.
  2. The card contains a question that is in the center of the inner circle. Around this inner circle the player is provided with answer options.
  3. To answer a question, a player needs to compare answers that are in the middle and outer circle, so that the information on the content and topic corresponds to the question in the inner circle.
  4. For every correct answer players will receive points, namely "brains". To pass the level they need to get enough points.
  5. Players are given three attempts to pass a level. If they make three mistakes, it causes loss of "life", which will force them to pass this card again.
  6. After successfully passing the level, "brains" are stored and accumulated. In case of accumulation of a certain number of points, players are given coins, which can be used to buy additional tips or the opportunity to skip questions, or get extra life by passing the level.

As you can see, the explanation looks like a game tutorial and informs players about every step in the game they need to know.

 

4. The process of account registration and rules for all users

This section informs users about the process of account creation. Our client, mobile game creator Pacwyn, proposes users to register or play as a guest. To register, players can use their Facebook, Apple or Google+ Account. Pacwyn then warns that players risk losing access to their accounts and any achieved progress if they use the app as a guest. In this case, Pacwyn must not be responsible for these consequences should a user continue under a guest account.

The next step is drawing up the list of activities prohibited when using the app. In Pacwyn’s Terms & Conditions, you can find following prohibited actions:

  • Providing content that harasses, insults, defames or threatens other users;
  • Placing advertisements or invitations, or otherwise engage in commercial activities;
  • Promotion or facilitation of illegal gambling or betting;
  • Attempting to decipher, decompile, disassemble or reverse engineer any software that is a part of the app, and other options.

For gamedev products, it is important to forbid cheating, which is any activity of gaining an unfair advantage by using specially created or modified software or non-standard hardware in games.

Pacwyn faced a cheating problem when a player developed automated bots and bypassed payments for faster development in the game. The player’s account was banned by Pacwyn admin, but the player did not agree with this action and threatened to sue the Game Dev studio. The issue arose because Pacwyn’s Terms & Conditions had not yet included clauses about cheating and the right to ban the account as a sanction for such activity. The conflict was resolved without going to court, and we added cheating clauses to Pacwyn’s Terms & Conditions to avoid the same dispute in the future. 

Now, a player is not permitted to participate in cheating or use system vulnerabilities and automated software, emulators, bots for modifying or interfering with the app by automatically obtaining in-game items, in-game currency without the player's personal involvement. Additionally, Pacwyn has the right to check all game modes and analyze the game progress statistics. If Pacwyn detects the use of cheating software, the company has the right to block an account without a refund.

 

5. The age restrictions

Every mobile app must indicate the acceptable age of potential users. For example, the Smart Watch mobile application is available for users over 16 years old, and the Trivia Quiz IQ Brain mind game is available for players starting at 4 years old.

 

6. The monetization model

Game creators are required to disclose the strategies and tools for monetizing their product and inform users about them. 

There are three main types of monetization:

  • Paid app. Once paid, the player gets lifetime access. 
  • Subscription, which is payment for time-limited access and may recur.
  • In-app purchases. Only a part of the game functions is available to a user for free, others need to be bought.

Trivia Quiz IQ Brain mind game players can pay the PRO subscription or buy coins to speed up development in the game, so the model is mixed and includes the subscription and in-app purchases in the Terms and conditions. Below is an example of how we drew up this part of Terms & Conditions for Trivia Quiz IQ Brain mind game to explain monetization strategy and the rules on in-app purchases.

Users can purchase PRO subscription for one month, or get a one-time forever. 

Key features of PRO subscription:

  • there is no cross-page advertising, which is shown to users between the levels;
  • 5 free tips every day;
  • unique questions.

The PRO subscription fee will be deducted through your App Store account upon confirmation of purchase. Mioris, the game developer and owner, does not process and is not responsible for processing of purchases. All transactions are processed by a third-party payment operator, Apple Inc.  The monthly PRO subscription is automatically renewed if the subscription is not canceled 24 hours before the end of the current subscription period. The automatic renewal can be disabled.

Coins, which is an in-game currency that users can purchase using real currency, watching video ads, or get for successfully passed levels.

Prices for PRO subscription and coins are set by Mioris and can be changed at any time.

 

7. The in-app advertising

An additional type of monetization is in-app advertising. So, it is important to warn users about the placement of advertising materials in the app. For example, Smart+Watch Sync app permits ad-partners, such as Google Admob and Facebook Audience Network to promote their ads and other data in specific spaces within the app.

 

8. The disclaimers 

Disclaimer limits the app’s owner liability should something go awry. Some examples you might see in a given Terms & Conditions include the following: 

  • The limitation of liability for improper work of an app due to unstable internet. For example, some features of the Pacwyn game require an active Internet connection, so the company is not liable when the game does not work to its full potential if players do not have access to Wi-Fi and stable mobile internet connection.
  • The limitation of liability for technical problems. The owner of an app does not guarantee that an app is free from mistakes, malware, errors or other issues that could potentially damage a user or interfere with their usage.
  • The limitation of liability for loss or damage as a the result of an in-app purchase. This tells players to spend money at their sole risk.
  • The limitation of liability for quality of third parties’ ads materials. This informs users that an app owner does not check every ad, service or product that shows up in the app. 

Moreover, it is necessary to set game status and delineate it from risk-based games, such as a lottery, bet, tote, or gambling.

 

9. The intellectual property rights

The task is to identify intellectual property objects and set the rules that copying them is strictly prohibited. To do so, we must compile a list of the intellectual property objects used in the app, which can include visual components, music, video, graphics, software code, gameplay, text, layout, databases and other options. The next step is a warning to users about what actions are prohibited, such as copying, republishing, modifying, distributing, licensing, performing engineering analysis or creating derivative apps based on your IT product.

 

10. The right to change Terms & Conditions

At any time, an app's Terms & Conditions may be changed by the app owner. A company should send users notices relating to changes to the document by e-mail or by posting in an app. 

Even if you are a young startup or this is your first app, you still need to have Terms & Conditions. 

The document is a protection for you, the business owner, from the many ways that something might go wrong. As a reminder, you will be protected against users’ violations, such as cheating, copyright infringement and spamming. If any of those cases take place, you are legally permitted to ban a user from continued use. Terms & Conditions give you the legal ground to run your business in safe and predictable conditions. So, try not to skip the Terms and Conditions when the longevity of your product is on the line. 

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