I was considering answering How prominent must terms of service be?; when I was struck by a thought: what is the point of website Terms and Conditions anyway?

Clearly, if they form a contract and they are properly brought to the attention of and agreed to by the user then they are binding (knowledge of and agreement by the provider could safely be assumed). However, one of the fundamental requirements of a contract is that both parties must provide valuable consideration. If the user is paying to access the service then this requirement is satisfied (e.g., a pay wall on a news site or a purchase agreement on an auction site). If they are not then they provide no consideration and there is therefore no contract.

For example, participation on this website is putatively subject to the agreement you can read by following the legal link below. How prominent must terms of service be? is the appropriate place to address whether the terms are prominent enough to constitute agreement (IMO it's arguable), so take it that they are. It is possible, that what we post is valuable consideration but I think that is worth a question on its own so I did Are the Q&A posted on Stack Exchange websites valuable consideration?, so take it that it isn't. In the absence of its users providing valuable consideration then there is no contract: What then is the point of the terms and conditions?

Clearly, such terms and conditions could be to draw the users' attention to legal obligations that exist as a matter or law without a contract (e.g., Copyright and other IP obligations). They could also be used to create rules that would allow users to be denied service, however, since anyone can be denied service for any reason so long as that reason is not unlawfully discriminatory, it seems pretty pointless.

4 Answers 4


A web site's Terms of Service are not a contract but, rather, a license. law.washington.edu has an interesting discussion of contracts vs. licenses and asks the question, "Does it matter?"

In the case of a web site, the owner of the web site is granting you a license, subject to certain terms, to access the web site and use it. No consideration is required for a license.

From the linked article, which discusses copyright, "In the context of copyright law, a 'license' is a permission to do an act that, without the permission, would be unlawful."

In the case of a web site's terms and conditions, the owner is granting permission to you to access and use the web site subject to the terms of the license. Typically, such a license will require you to release any liability that may accrue because of your use of the site.

The Stack Exchange license, in fact, grants certain permissions related to copyright, "Subscriber may download or copy the Content, and other items displayed on the Network for download, for personal use, provided that Subscriber maintains all copyright and other notices contained in such Content."

The Stack Exchange license also places requirements on those who contribute to discussion including a requirement to "perpetually and irrevocably [license] to Stack Exchange" anything we post.

In this case, by pressing the "Post Your Answer" question, I have agreed to license my creation, this answer, to Stack Exchange.

  • 4
    Why would you not be able to visit a website legally without a license? I don't need a license to read a billboard, wouldn't a website without access control be the same as a billboard?
    – Andy
    Commented Aug 30, 2015 at 22:41
  • When I wrote "access and use" I wrote them as a single phrase, not as one item is access and another item is use. You can read StackExchange's terms of service here: stackexchange.com/legal After reading the first few paragraphs you can see what StackExchange is offering and what you are accepting in the license. The question of whether or not you need a license is interesting since most "terms and conditions" are self-imposed, i.e., by reading this web site you agree to the terms and conditions. See nolo.com/legal-encyclopedia/website-terms-conditions-29759.html
    – Dave D
    Commented Aug 30, 2015 at 23:09
  • I wasn't trying to nitpick use and access, and for my question I'm specifically talking about only browsing the site, but not posting questions answers or creating an account. Needing a license to simply read a public site sounded odd, as i wouldn't need a license to read a public billboard (i think). So i'm wondering, if i don't need a license for the site can i actually be bound by it. Sorry if my thinking is out there i'm not a lawyer (obviously) but a software engineer that builds websites, so this interests me.
    – Andy
    Commented Aug 30, 2015 at 23:36
  • Generally, a license allows you to do something that would otherwise be illegal. Most of the web site licenses I've seen are related to limiting the liability of the web site owner and imposing some responsibility on the user. I don't know if there is any practical affect on someone who merely reads a web site that has no access control; it is, as you say, not dissimilar to a billboard. The answer I provided was related to copyright and the concept of contract vs. license. Perhaps your question warrants a unique question on this site.
    – Dave D
    Commented Aug 30, 2015 at 23:43

The short answer is to limit liability in a whole host of ways.

Website terms and conditions seek to, first and foremost, limit liability by ensuring that the host cannot be held responsible for the actions or opinions of users.

The terms and conditions, if read, necessarily expound upon the purpose of the site. Of course they also dictate the terms of acceptable behavior/use, but liability is generally why they are everywhere.


Essentially it's 3 things.

  1. Legal disclaimer = Everything they don't want to be responsible for.

  2. Rules = What you are and are not allowed to do with their thing.

  3. Exchange cost = What you allow them to get from you. Sometimes this is the bare minimum required to operate the service you want to use. E.g., they can't make you a picture gallery online if you don't allow them to touch your pictures. However very often it's also giving up data and rights they'd have to normally ask permission for or buy from you. They overcharge - same way as a merchant doesn't ask you the exact cost it took to produce the product - but charges you extra. It's the extra charge that all the fuss is about around the web.

Having detailed information about people is proven to be a valuable commodity in and of it self.

  • Looks like a good answer, but I don't follow point #3 entirely. Are you arguing that #3 illustrates that there is in fact "consideration" and so the T&Cs are a contract? And you completely lost me on the last two sentences of #3.
    – feetwet
    Commented Sep 24, 2015 at 16:55
  • As if you just arrived on the planet and have never heard of companies aggregating user data and selling it to each other. Just because they don't have an explicit price tag and a bottom line saying you owe them $$$, doesn't mean that many people don't go way beyond running their service and protecting themselves from law suits in their terms and conditions. Its entirely irrelevant to the point if you are the kind of person that finds trading privacy and/or data acceptable in order to use a service.
    – helena4
    Commented Sep 24, 2015 at 21:45
  • I can't tell if you misunderstood my comment: It was literally a question for clarification: Do you mean that the third purpose of T&Cs is to make it clear that even though the service is getting something of value from the user the user is not entitled to explicit or direct compensation?
    – feetwet
    Commented Sep 24, 2015 at 23:39
  • Sure, "You hereby grant to Skype a non-exclusive, worldwide, perpetual, irrevocable, royalty-free, sublicensable and transferable licence to Use the Content in any media in connection with the Skype Software, the Products and the Skype Website." This was once a policy ... How does it look - are they going to pay you or ask you when using your data? If you agree to this? In plain words you can't even conduct ANY business calls over skype if they contain ANY sensitive data. What it if it your business plans, server passwords, sensitive information... Not that phone companies are much better...
    – helena4
    Commented Sep 25, 2015 at 8:52

One answer is that website visitors are providing valuable consideration merely by visiting and spending time on a site: Websites are monetized based on traffic. There are explicit formulas that equate visits (and often the characteristics and behavior during those visits) to monetary value. Advertisers will pay based on those numbers. And even in the absence of paid advertisement, companies with no revenue have been bought based on the size and quality of their audience.

(Which I suppose leads to the question of why traditional public media don't feel the need to plaster terms of service all over their content. Perhaps that is because they are regulated by the FCC.)

  • The fact that a third-party pays for a visit by a user is not valuable consideration from the user and does not form a contract between the user and the site.
    – Dale M
    Commented Aug 17, 2015 at 0:05
  • My observations establish that the user's visit has economic value. Valuable consideration is the exchange of something of economic value. The visit has value and is given by the user to the website. "Valuable consideration" does not require that the receiver actually exchange it for some other asset.
    – feetwet
    Commented Aug 17, 2015 at 1:13
  • I'm not saying it doesn't have economic value - my eyeballs on a free-to-air TV ad have economic value but they do not create a contract between me and the TV station or me and the advertiser. To form a contract between A & B, valuable consideration must travel from A to B and vice-versa.
    – Dale M
    Commented Aug 17, 2015 at 1:16
  • You're arguing that a user's request to load a page from a site, even though having explicit economic value, cannot be valuable consideration because ... what, it doesn't constitute a physical object? AFAIK that's just wrong. For example, "valuable consideration" can be something as ephemeral as an agreement to not do something that a party is otherwise entitled to do. In the case of a website transaction the user requesting a page is valuable consideration, and the site sending the page is likewise. Bet you'll never watch TV so carelessly again ;)
    – feetwet
    Commented Aug 17, 2015 at 1:25
  • Good point but by sending a request I have not at that time agreed to the terms and conditions so any consideration pre-dates the contract and "past consideration is no consideration".
    – Dale M
    Commented Aug 17, 2015 at 1:55

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