Online platform access agreement
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This article is written by Pratha Kotecha, pursuing a Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution from LawSikho.

Introduction

A service agreement is a contract in the written form between two parties- the service provider and the client. The agreement enumerates the work to be performed and the obligations and responsibilities of the parties to the agreement in getting the work or the job done and paid for. The service agreement is at times also known by the names of professional services agreement, client services agreement, etc., and includes time limit from the start to the end of the work, an additional extension of time if needed, and such other procedures and details as involved in the job.

Online Platform refers to a wide range of services available on the Internet which includes marketplaces, search engines, creative content outlets, app stores, communications services, payment systems, social media, services comprising the so-called “collaborative” or “gig” economy, and much more. An online platform can be defined as a digital service that facilitates interactions or communications between two or more distinct but interdependent sets of users, who can be either firms or individuals, and who interact through the service via the Internet.

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When you enter into a contract with a service provider or from an internet provider, you are provided with a platform service agreement from the provider. This service agreement explains the relationship between the user and the service provider. For the majority part, these agreements have standard language and boilerplate provisions. Although the contract with a high-end provider is not easily negotiable, a contract with a small to medium-size business is most probably negotiable. The important and basic provisions to keep in mind when entering into a platform service agreement includes payment, the scope of services provided, termination, liability and insurance, confidentiality, IP ownership, and governing law/dispute resolution among others. 

How to write an Online Platform Access Agreement?

The title of the agreement should include the name of the service provider or the company and “service agreement”, “online platform access agreement”, “platform service agreement” or any other title which accurately describes the situation at hand. 

Many aspects of such a service agreement can be standardized, and you can use a template that provides the basics that you will need for your party the majority of the time. The template might also need some adjustment in order to accommodate the specific arrangements that will need to be made on a client-to-client basis. But in general, you will be able to fill in the blanks in the template without reinventing the wheel each time a new user or client comes.

The clauses and sections differ for different industries and professions, but the following sections or clauses are in general included in the agreement.

  • The Acceptance Clause: The initial clause in any platform service agreement includes an acceptance clause or the terms and conditions clause, also known as the terms of use clause. The clause can be generally worded as follows: 

“Please read the terms of use carefully before using this site. By using this site, users hereby declare their acceptance of and undertake to comply with these Terms of Use. If one does not accept these terms, they are requested to refrain from using the site.” 

Or

“By clicking the “I accept” button or otherwise accepting this Agreement through the Document that incorporates these Terms and Conditions, You agree to follow, abide, and be bound by the terms and conditions of this Agreement. If You are entering into this Agreement on behalf of a company or other legal entity, You represent that You have the authority to bind such entity to this Agreement and, in such event, “You” and “Your” as used in this Agreement shall refer to such entity.”

  • The details and descriptions of the parties to the agreement. The complete detail of the service provider, the type of entity, or the corporation as to Limited Liability Company, partnership firm, etc. should be included along with the registration details and authorized representative depending on the circumstances. The description of the platform along with the matching services it provides also needs to be mentioned clearly.  The services rendered should be described in as much detail as possible, keeping in mind the fees and that it won’t be able to change in case of additional work other than specified. 
  • A description of fees, taxes, and payment schedules to be included that explains the terms of whether the charges are calculated on an hourly, weekly, monthly, or yearly basis; or whether you are charging a flat fee for every service or project. The payment section should also include the types of payments which are accepted, such as NEFT, IMPS, any payment apps, or credit cards. Few agreements will also include a clause that specifies the course of the event if payments are not received according to the schedule.
  • A clause explaining the platform use and its features whereby the representations and warranties made by the service provider are explicitly mentioned. The nature of liability- limited or absolute, the warranty whether implied, and such other details as the situation demands. 
  • End-User Information or Data Security clause- The service provider to add a clause relating to the data security of the platform. The rules and laws which it follows in relation to the data received the manner in which the user or the customer data can be used or utilized by the service provider. This clause shall also include the cookies and the use of cookies and tracking technologies of the online platform. And also in an event of a data breach, the laws which will apply are to be included. 
  • The clause relating to Intellectual Property Rights which among other things includes copyright, trademark, and patents. In India, the software matter falls under copyright law. The person making and creating the program has copyright over it and therefore it is allowed to be licensed by the owner to another entity for use. 

If the software is designed in a manner that allows for the creation, making, storage, and dissemination of content generated by the user, then the entity licensing such software must also take a license from each such user to store in their database and disseminate the user-generated content. For example, with applications such as YouTube or MX Taka Tak such a license would be essential from the user. The clause must explicitly mention that the user agrees to a non-exclusive, non-sublicensable, non-assignable, royalty-free license to be granted to the entity for the use of the content while the user continues to retain all the copyrights in the content.

  • The clause of the privacy policy, wherein the types of information collected, how to keep it safe and secure, the details of any third parties who will be holding the information on your behalf (e.g. cloud storage provider); and what you intend to do with that information and in what circumstances you will release it; the manner in which the user can review the information you hold on them; and how the user can change or delete that information, etc. is to be provided. 
  • Restrictions on Disclosure to Third Parties. This clause aims to lower the risks of the service provider sharing personal information with a third party without the customer’s permission. If appropriate, the customer can use the bracketed language to permit the disclosure to third parties solely to comply with legal requirements. In this case, the customer should include the additional bracketed conditions on the service provider, including the obligation to provide prior notice, if possible.
  • Confidentiality Clause:  A technology agreement often involves the transfer of sensitive information and trade secrets. In case of a breach, the licensee might face financial harm as well as impact the goodwill of the company. Therefore, the agreement must contain a certain strong confidentiality protection clause. 
  • Term and Termination Clause- this is an essential clause in any agreement in order to specify how and under what circumstances a party can terminate the agreement. The term clause should specifically provide the term of the contract, the conditions for the extension of the contract, and the provision for the mutual termination of the contract. However, not all platform services require a termination clause, as once the payment is done, the agreement is automatically deemed to be terminated. 
  • The clause regarding dispute resolution- In an event of a dispute, the parties are free to choose any dispute resolution method. In case the dispute is to be submitted to arbitration, the place, venue, or the legal seat of the arbitration has to be pre-determined, particularly in the cases of an international relationship.  It is important to consider the country in which the seat of arbitration will be located to check if it offers an “arbitration-friendly” environment. For instance, where the municipal or the local courts will enforce the arbitration agreement, and not unduly interfere in the arbitration proceedings, and abide by the finality of the award.
  • Governing Law- as the services in an online platform can be used around the globe, it is very vital to specify clearly which country’s law will govern the contract. There are two parts to these provisions: governing law (the law that will be used to decide the dispute) and jurisdiction (where the dispute will be decided). The jurisdiction is usually in the country or state where the business or the service provider is based.
  • An agreement should include a force majeure clause which typically includes a list of exhaustive events such as acts of God, flood, tsunami, war, terrorism, earthquakes, hurricanes, acts of government, explosions, fire, plagues, pandemic or epidemics, or a non-exhaustive list wherein the parties simply narrate what generally constitute force majeure events and thereafter add “and such other acts or events that are beyond the control of parties”.

Conclusion

These are the basic clauses in any Platform service agreements, apart from these, for certain types of businesses, they can also be required to include provisions or clauses which deal with specialized or specific situations in the agreement.

References

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