Most businesses today recognize that not having a website is akin to what it use to mean to not be listed in the telephone directory: a slow (or maybe even a quick) death. Ok, your website developer created a dynamic website containing key terms to maximize search engine optimization, and you are very pleased with the traffic on the website. However, either because you did not deem it important or you wanted to conserve financial resources, you likely put up Terms of Use and a Privacy Policy you "borrowed" from another website or terms supplied by your website developer. Leaving aside other potential issues (think copyright), you have also missed the point that one size does not fit when it comes to website policies. Understand that these policies are actually a contract between you and the user of your website, and thus the terms must be consistent with your company's business activities (example: do you utilize customer information for marketing purposes). Therefore, both the Terms of Use and the Privacy Policy need to be tailored to fit your (1) particular type of business -- for example, online retailer vs. online provider of a service, and (2) company's business policies.
Bottom line: The risk is tremendous if you do not include Terms of Use and a Privacy Policy appropriate for your business. You should have them drafted, and if you have them already, then reviewed by a lawyer who is experienced in preparing these policies.
Note: Since there are a number of important issues relating to website policies, consider the above the first installment of a multi-part discussion on the topic.
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