MAKE YOUR FREE AI Terms of Service
What we'll cover
What are AI Terms of Service?
AI Terms of Service set out terms under which a business provides an AI-based software product to users. These AI Terms of Service contain a licence under which users can use the software product, as well as the terms and conditions of the contracts users will form with the software's provider to allow them to use the software product.
When should I use AI Terms of Service?
Use these AI Terms of Service:
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for software products that are based on artificial intelligence (AI) models or which incorporate AI-based components
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to provide your software product:
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to consumers and/or to other businesses
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for free and/or in exchange for payment, and
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on standard terms
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if your business provides its software as a service (SaaS) via a website (ie not as a download or via a physical medium, like a disc)
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for businesses in England, Wales, or Scotland that provide software products intended for use within the UK
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TERMS OF USE
These Terms of Use, together with any other terms agreed to between the Parties regarding payment and service provision, form the Licence Agreement (or the Agreement) that is made on the Effective Date between the Parties:
- The User (or you);
which sets out the terms under which the User is granted a licence by the Provider to use the Provider’s Software. Users must only use the Software in accordance with these Terms of Use. By indicating acceptance of these Terms of Use in order to access or use the Software, the User enters into the Agreement and accepts all of these Terms of Use and must always abide by them when using the Software or the Software’s output. If you do not agree with these Terms of Use, you must not use the Software.
Definitions
- In this Agreement, the following words are defined:
Business Customer
An entity or individual purchasing or using the Software for purposes relating to their trade, business, craft, or profession;
Confidential Information
in relation to any party, any information (whether or not stated to be confidential or marked as such) that is disclosed by that party to a second party, or which that second party obtains from any information disclosed to it by the first party, either orally or in writing or by any other means;
Consumer
an individual purchasing or using the Software as an individual for purposes that are wholly or mainly outside of their trade, business, craft, or profession;
Effective Date
the date on which the User indicates their acceptance of these Terms of Use and of the terms of the Agreement;
Intellectual Property Rights
any invention, patent, utility model right, copyright and related right, registered design, unregistered design right, trade mark, trade name, internet domain name, design right, design, service mark, database rights, topography rights, rights in get-up, rights in goodwill or to sue for passing off, and any other rights of a similar nature, or other industrial or intellectual property rights owned or used by the relevant party in any part of the world whether or not any of the same is registered (or capable of registration), including applications and the right to apply for and be granted, extensions or renewals of, and rights to claim priority from, such rights and all equivalent or similar rights or protections which subsist now or will subsist in the future;
Parties
the Provider and the User; either of which may be referred to singularly within this Agreement as a ‘Party’;
Software
the software product, constituting the underlying artificial intelligence (AI) model(s) and other code, the user-facing tool built on this, and any supplementary software, technical infrastructure, or content (e.g. apps, instructive content, or supplementary programmes), that the User is granted access to by the Provider as the provision of services to the User by the Provider;
UK Data Protection Laws
all UK laws relevant to the regulation of the processing of individuals’ personal data (as defined in the UK General Data Protection Regulation (i.e. ‘UK GDPR’ or the retained Regulation (EU) 2016/679 of the European Parliament and of the Council)), particularly the UK GDPR and the Data Protection Act 2018.
Grant of Licence
- Subject to these Terms of Use and all other terms comprising the Licence Agreement, the Provider grants the User a limited, revocable, non-exclusive, non-sublicensable, and non-transferable licence for the duration of the Term to use the Software in accordance with these Terms of Use (the Licence).
- To access the Software under the Licence, the Provider will require the User to register for an account by providing certain information (e.g. an email address, name, and password).
- The User acknowledges that they are not granted any ownership of the Software or any proprietary rights in the Software (including Intellectual Property Rights) and, as such, the User does not have permission to alter, reproduce, sell, disassemble, edit, rebrand, distribute, lend, hire, or sub-license the Software or any component part of the Software, or otherwise use the Software in a manner only consistent with ownership of the Software.
Effect of Termination
- When the Agreement is terminated or expires, the User’s Licence to use the Software and the Provider’s obligation to provide the Software will end.
- The terms contained in the sections headed “Restrictions on Use”, “Intellectual Property Rights”, “Proprietary Rights to Data”, and “Data Protection and Privacy”, any other terms that by their nature must survive this Agreement, shall remain effective after termination or expiry of the Agreement. All other obligations between the Parties shall end at the time of termination.
Fees
Restrictions on Use
- To use the Software or to hold a Licence to use the Software, an individual must be aged 18-years-old or older and must be capable of entering into a legal contract for the use of the Software.
- Except as allowed elsewhere in the Agreement, the User must not:
Alter, reproduce, sell, disassemble, edit, rebrand, distribute, lend, hire, or sub-license the Software or any right of use of the Software to any other parties;
Allow others to use the Software via the User’s exclusive permitted access (e.g. using the User’s email address and account);
Use the Software, its components, or its output in any way that may infringe the Intellectual Property Rights or any other proprietary rights of the Provider or of any third party;
Remove or alter any markings that indicate ownership of the Software or of its output, for example, trade mark or copyright symbols;
Input any parties’ personal data or other private information into the Software, or use any of the Software’s output that contains such, except in accordance with UK Data Protection Laws and with this Agreement;
Attempt to reverse engineer or otherwise access or use the Software or its components in order to set up or contribute to an endeavour that may compete with the Provider’s Software, whether such an endeavour is commercial or not (e.g. by using aspects of the Software as part of the development of the User’s own software product);
Use the Software to construct any kind of database or to conduct automated or systemic data scraping, data mining, data extraction, or similar data collection activities;
Negligently or intentionally input content into the Software that introduces any virus, worm, cancelbot, trojan horse, or other destructive or contaminating code or programme;
Attempt to damage, interfere with, slow, or otherwise alter the Software, its performance, or its integrity;
If the User is a Consumer, use the Software for any commercial purposes;
Rely on the Software’s output as being factually accurate, up-to-date, or complete;
Input information into the Software or use the Software in a manner that breaches any applicable laws, regulations, or other rules;
Input information into the Software or use the Software in a manner that is defamatory, unlawful, immoral, tortuous, fraudulent, harmful, or deceptive; or
Use the Software outside of the UK.
Warranties
- The Provider warrants that the Software will be provided as a service with reasonable care and skill, as described, and in accordance with these Terms of Use and with any other specifications set out by the Provider and incorporated into the Agreement. If this clause is breached, the User may be entitled to correction of errors or a refund as the Provider considers appropriate.
- If the User is a Consumer, the Provider warrants that the Software is fit for purpose and of satisfactory quality. If this clause is breached, the User may be entitled to a correction of errors or a refund as appropriate.
- Aside from the warranties in the two clauses above, the Provider does not provide any warranties regarding the quality, suitability for particular uses, or other aspects of the Software. In particular:
The Provider does not warrant that output produced by the Software is accurate, up-to-date, or complete, and content should not be relied on to provide advice or otherwise treated as factually correct;
The Provider does not warrant that the Software will always be available and is not responsible for any temporary unavailability (e.g. due to platform or network issues).
- The User warrants that it has the right (via rights or interests in or rights to use) to input into the Software any data that it inputs into the Software. Further, the User warrants that any such data is not harmful, corrupted, unlawful, or otherwise in breach of the Agreement.
- The User warrants that it has a right to use any personal data (as defined by the UK GDPR) that it inputs into the Software. Further, the User warrants that it has a lawful basis for any use made of this personal data in relation to the Software and that all processing of this data that it carries out in relation to the Software is in accordance with the lawful basis for processing and with UK Data Protection Laws generally.
Indemnities
- The Provider shall indemnify the User against all losses, liabilities, costs, expenses, or damages, whether due to claims or action by third parties or otherwise, that the User directly or indirectly incurs arising out of or as a consequence of any breach of the Provider’s Warranties set out above under the heading “Warranties”.
- The User shall indemnify the Provider against all losses, liabilities, costs, expenses, or damages, whether due to claims or action by third parties or otherwise, that the Provider directly or indirectly incurs arising out of or as a consequence of any breach of the User’s Warranties set out above under the heading “Warranties”.
- The User shall indemnify the Provider against any reasonably foreseeable direct losses, damages, or reasonable expenses that the Provider incurs in relation to the User’s breach of the Agreement, the User’s infringement of any third party’s rights, or the User’s otherwise unlawful use of the Software.
Limitation of Liability
- Nothing in this Agreement limits or excludes either Party’s liability in any way for:
- Death or personal injury caused by its negligence;
- Fraud or fraudulent misrepresentation; or
- Any other losses that cannot be limited or excluded by applicable law.
- This clause applies to Consumers only: except as set out in the first clause of this section (i.e. the section headed “Limitation of Liability”) and in the sections headed “Warranties” and “Indemnities”, the Provider is only liable to the User for loss or damage resulting from the Provider’s negligence or the Provider’s breach of the Agreement when such loss or damage is foreseeable (i.e. when both the User and the Provider knew at the time the Agreement was formed that this loss or damage may reasonably occur as a result of the Provider’s conduct). The Provider is not liable for any unforeseeable loss or damage, any business damage or loss, any loss or damage not caused by the Provider’s negligence or breach of the Agreement, or any loss or damage caused by the User’s reliance on the output of the Software against these Terms of Use.
- This clause applies to Business Customers only: except as set out in the first clause of this section (i.e. the section headed “Limitation of Liability”) and in the sections headed “Warranties” and “Indemnities”, the Provider shall not have any direct or indirect liability to the User, whether in contract, tort (including negligence), for breach of statutory duty, or otherwise, arising under or in connection with this Agreement or in connection with the use or lack of use of the Software, for:
Loss of profits, business, sales, revenue, opportunity, savings, or contracts;
Loss of use or corruption of software, data, or information, or damage to equipment;
Any harm to reputation or goodwill; or
Any indirect, special, incidental, or consequential loss.
- This clause applies to Business Customers only: except as set out in the first clause of this section (i.e. the section headed “Limitation of Liability”) and in the sections headed “Warranties” and “Indemnities”, the total liability of the Provider for any losses experienced by the User in respect of any one event or series of connected events in relation to the Provider’s conduct in relation to this Agreement shall not exceed the lower of the total aggregate of the payments made by the User to the Provider under this Agreement within the last 12 months or £.
- Particularly, except as set out elsewhere in these Terms of Use, note that the Provider is not responsible for issues that occur as a result of the User’s use of the Software that may be due to the Software’s use of AI, including but not limited to:
- Intellectual Property Right infringements occurring due to the User’s use of the Software or their use of the output created by use of the Software;
Losses or inefficiencies incurred due to the provision of inaccurate, misleading, or non-specific information;
Breaches of UK Data Protection Laws occurring due to the User’s use of the Software or their use of the output created by their use of the Software;
Breaches of equality laws or specific data protection laws related to decision making;
Breaches of advertising or marketing laws occurring due to the User’s use of the Software or their use of the output created by their use of the Software;
Breaches of defamation laws occurring due to the User’s use of the Software or their use of the output created by their use of the Software;
Breaches of any duty held by the User not to disclose another party’s Confidential Information; or
Losses incurred due to damage to technical infrastructure.
Intellectual Property Rights
- The Provider retains all Intellectual Property Rights it owns in the Software and in aspects of the Provider’s wider business, including but not limited to trade marks, copyrights, moral rights, patents, design rights, and data rights.
- The User retains all Intellectual Property Rights it owns in any data or content that they input into the Software or otherwise use as part of their use of the Software.
- If the User inputs data or content in which the User holds Intellectual Property Rights into the Software, and consequent output of the Software contains elements of this data or content as well as data or content in which the Provider (or, in the case of Intellectual Property Rights that the Provider has permission to use, other parties) holds Intellectual Property Rights, all parties involved will retain ownership of their respective Intellectual Property Rights. This clause qualifies the clause on Intellectual Property Rights ownership immediately preceding this clause. The User is responsible for ensuring that it does not use any such Software output in a way that infringes on the Intellectual Property Rights of any other parties.
Proprietary Rights to Data
- The User retains all rights, interests, and titles held in any data that it inputs into the Software.
Data Protection and Privacy
- Both the User and the Provider commit to abiding by UK Data Protection Laws in relation to the Software and its development and use. The Provider commits to using any of the User’s data that is provided to it only in accordance with UK Data Protection Laws and will not disclose this data to any third parties unless authorised to do so. For more information on how the Provider uses users’ data, see the Provider’s Website Privacy Policy, accessible here: .
- The User is responsible for and maintains control over any personal data that it is the data controller of or that it is otherwise responsible for and authorised to use as input into the Software. The User (and not the Provider) is responsible for ensuring that processing of any such personal data using the Software is carried out in reliance on a lawful basis for processing and in accordance with UK Data Protection Laws. If such personal data is:
Included in output of the Software, it is the User’s responsibility to ensure that use of this output does not infringe upon anybody’s data protection rights.
Service Provision Information
- The Provider reserves the right to make updates or changes to the Software as necessary to maintain, fix, or improve the Software.
- The User is responsible for ensuring that they have adequate hardware and software to run the Software as intended. The Software has the following compatibility requirements:
- Descriptions of the Software are available on the Provider’s website. Make sure that you read these before agreeing to the Terms of Use.
- If the User is a Consumer, the User has a statutory right to cancel the Agreement (e.g. their purchase of access to the Software) within a period of 14 days from the date of purchase. However, by accepting these Terms of Use, the User expressly requests the Provider to grant the User immediate access to the Software following the acceptance of the Terms of Use and the User acknowledges that, in making such a request, they waive the right to cancel as described.
- The Software has the following functionality:
- Any complaints regarding the Software or the Provider’s provision of it will be dealt with by the Provider as follows:
- The Provider can be contacted via email at .
Circumstances Beyond the Control of Either Party (Force Majeure)
- Neither Party shall be liable for any failure or delay in performing their obligations under this Agreement (e.g. provision of payment or of Software) where such failure or delay results from any cause that is beyond the reasonable control of that Party.
- Such causes include, but are not limited to: power failure, Internet Service Provider failure, acts of God, epidemic, pandemic, civil unrest, fire, flood, droughts, storms, earthquakes, collapse of buildings, explosion or accident, acts of terrorism, acts of war, governmental action, any law, or any action taken by a government or public authority, including without limitation imposing an export or import restriction, quota, or prohibition, or any other event that is beyond the control of the Party in question.
- The Party affected by a circumstance beyond its control shall use all reasonable endeavours to mitigate the effect of the circumstance upon the performance of its obligations.
- The corresponding obligations of the other Party will be suspended to the same extent as those of the Party affected by the force majeure event.
- If the delay continues for a period of 30 days, either Party may terminate the Agreement. Other termination methods, as set out above in the section headed “Term and Termination” may, if applicable, be used to end the Agreement before such a 30-day period has elapsed.
General Terms
- If the User is a Business Customer placing an order on behalf of a business, the User confirms that they have the necessary authority to place the relevant order for and on behalf of that business.
- The Agreement contains the whole agreement between the Parties relating to its subject matter and supersedes all prior discussions, arrangements, or agreements that might have taken place in relation to the Agreement. Nothing in this clause limits or excludes any liability for fraud or fraudulent misrepresentation.
- Except as allowed above, neither Party may assign, transfer, sub-licence, or sub-contract to any third party the benefit and/or burden of the Agreement or of any of the rights under this Agreement without the prior written consent (not to be unreasonably withheld) of the other Party.
- No variation of the Agreement will be valid or binding unless it is recorded in writing and signed by or on behalf of both Parties, except that:
Changes may be made by the Provider in accordance with other terms of these Terms of Use; and
Changes may be made by the Provider to these Terms of Use. The version of the Terms of Use that applies to a specific Agreement are those that are current on the Effective Date. Notification of any changes to the Terms of Use will be made in writing either in a manner that brings notice to the User’s attention before they next use the Software (e.g. via a pop-up on a login screen) or via direct communication with the User (e.g. by email). If changes are made to the Terms of Use, the User’s use of the Software after the changes are communicated and implemented is deemed to constitute their acceptance of the new Terms. If the User does not wish to accept the new Terms of Use, they can terminate the Agreement in accordance with the provisions above in the section headed “Term and Termination”.
- The does not apply to the Agreement and no third party has any right to enforce or rely on any provision of the Agreement.
- Unless otherwise agreed, no delay, act, or omission by a Party in exercising any right or remedy available in relation to this Agreement will be deemed a waiver of that, or any other, right or remedy.
- If any court or competent authority finds that any provision or part of the Agreement is invalid, illegal, or unenforceable, that provision or part will, to the extent required, be deemed to be deleted, and the validity and enforceability of the other provisions of the Agreement will not be affected.
- Nothing in the Agreement will establish any employment relationship, partnership, or joint venture between the Parties, or mean that one Party becomes the agent of the other Party, nor does the Agreement authorise any Party to enter into any commitments for or on behalf of the other Party.
- Any notice (other than in legal proceedings) to be delivered under the Agreement must be in writing and delivered by email to the email address provided in these Terms of Use (for notices sent to the Provider) or to the email provided by the User when the User registers their account used to access the Software (for notices sent to the User).
Governing Law and Jurisdiction
- This Agreement will be governed by and interpreted according to the laws of.
- If the User is a Consumer who resides elsewhere in the UK, the User may also make use of any protections given to the User by the laws of the constituent country in which they reside. All disputes and claims arising under the Agreement where the User is a Consumer (including non-contractual disputes or claims) will be subject to the non-exclusive jurisdiction of the courts of.
- If the User is a Business Customer, all disputes and claims arising under the Agreement (including non-contractual disputes or claims) will be subject to the exclusive jurisdiction of the courts of.
About AI Terms of Service
Learn more about making your AI Terms of Service
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How to make AI Terms of Service
Making your AI Terms of Service online is simple. Just answer a few questions and Rocket Lawyer will build your document for you. When you have all the information about how your software product can be used prepared in advance, creating your document is a quick and easy process.
You’ll need the following information:
Details of the business providing the software product
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What is the provider business’ name and legal structure? If it’s a company, what is its company number?
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What are the provider’s address, email address, and phone number?
The software product
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What is the name of the software product that the AI Terms of Service are being created for?
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Are the AI Terms of Service to cover a paid-for version of the product, a free version, or both?
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What is the software product’s key functionality information? For example, information about its region coding and other restrictions.
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What compatibility requirements does the software have?
Use of the software product
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Are users prohibited from:
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Using the software product or its output as part of goods or services that they offer as a business?
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Using the software product to inform research or analysis or to make decisions in a manner that may impact people’s access to goods or services?
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Other manners of use?
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If so, what are the restrictions?
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Contracts for use of the software product
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Are any fees charged for use of the software product inclusive or exclusive of value added tax (VAT)? Or, is VAT not applicable?
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Will the provider indemnify users against (ie promise to cover costs incurred due to) losses due to intellectual property right (IPR) infringements that are not due to content the user has input into the software?
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What is the provider's maximum liability for a user's losses related to the user's use of the software? This limitation of liability will only apply to business customers.
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If the provider wants to stop providing the software product to a user (not for a reason like, for example, the user’s breach of the AI Terms of Service), how much notice must the provider give to the user?
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Does the provider provide any after-sales services (ie services provided after a user has entered into a contract for the provision of goods or services, eg support using the software product)?
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If so, which services?
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Is the provider committed to any codes of conduct (ie sets of standards that businesses voluntarily commit to)?
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If so, which ones?
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How does the provider deal with complaints from users?
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If the provider is based in Scotland, will the AI Terms of Service (ie the contracts that are formed that incorporate them) be governed by the laws of England and Wales or the laws of Scotland?
Ownership and licences
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If a user uses the software product to create original content, does the provider or the user own any IPRs in this content (subject to the effect of existing IPRs)?
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Can the provider use data that users input into the software to improve the software?
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If so, will the provider indemnify the user against any data protection rights infringements due to user-controlled personal data that the provider uses to improve the software later being included in output provided to other users?
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Privacy
- What is the URL of the provider's Website privacy policy?
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Common terms in AI Terms of Service
AI Terms of Service set out the basis on which a user can access a software product. To do this, this AI Terms of Service template includes the following terms and sections:
Parties and basics
The AI Terms of Service start by clearly identifying the parties to a contract for the provisions of services (ie for use of the software product) and how the AI Terms of Service fit in (ie they are to be incorporated into such contracts alongside other terms when a user accepts the Terms of Service).
Definitions
This table defines key terms used within the AI Terms of Service. For example, ‘Consumer’, ‘Software’, and ‘Effective Date’. When these terms are used capitalised within the AI Terms of Service they will carry the meanings they’re given in this table.
Grant of licence
This section contains the permission (ie licence) a user is granted to use the software product in accordance with the AI Terms of Service. It sets out the parameters of the licence and clarifies that a user is not granted ownership of the software product.
Term and termination
This section sets out how long a user’s contract for use of the software product will last. It explains how a contract can be ended and, to identify how long a contract will last if not consciously ended, refers to the term agreed to separately between the parties.
If the AI Terms of Service are being made to cover both paid-for and free versions of the software product, this section will be split into two separate sections, one dealing with term and termination of the paid-for version and the other with term and termination of the free version.
Effect of termination
Here the AI Terms of Service explain what happens after a contract for use of the software product ends. For example, it specifies when a user may receive a refund and clarifies which obligations the parties will still owe to each other.
Suspension of use of the software
This section is included if the AI Terms of Service cover a paid-for version of the software product. It grants the provider a right to pause a user’s access to the software product, following certain rules, if the user does not pay the fees they owe.
Fees
If the AI Terms of Service cover a paid-for version of the software product, this section sets out a user’s commitment to paying the fees they’ve agreed to pay to access the software product. It will also state the provider’s right to change the fees from time to time and how this is to be managed, and sets out whether VAT is included, excluded, or not applicable.
If the AI Terms of Service cover a free version of the software product, this section states that if a user has only agreed to access (and only accesses) the free version, they do not owe any fees.
Restrictions on use
Here the AI Terms of Service impose restrictions on how the software product may be used. These are largely aimed at ensuring legal, financial, and ethical safety, and are tailored to software products that are based on or which incorporate AI. Some of the prohibitions are optional. Examples include prohibitions on:
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altering, reproducing, or editing the software or selling it to other parties
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using the software to construct a database or to conduct automated or systemic data scraping, data mining, data extraction, or similar
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inputting information into the software or using the software in a manner that breaches any applicable laws, regulations, or other rules
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using the software’s output to provide information, advice, or other services to commercial clients
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inputting information into the software or using the software in a manner that is defamatory, unlawful, immoral, fraudulent, harmful, or deceptive
Warranties
Here the warranties (ie legally binding promises or statements) made by the parties are set out. These include, for example:
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the provider’s assertion that the software will be provided as a service with reasonable care and skill, as described, and in accordance with the AI Terms of Service
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the user’s assertion that they have a right (via rights or interests in or rights to use) to input into the software any data that they input into the software
The section also clarifies certain warranties that the provider does not provide. For example, that the software’s output will always be accurate, up-to-date, or complete.
Indemnities
Here, the parties promise to indemnify each other against (ie to cover the costs of) any losses that the other suffers due to certain things. For example, losses:
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by a party due to the other party’s breach of any of their warranties provided above
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by the provider due to a user’s other breaches of the AI Terms of Service, subject to qualifications
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by a user due to IPR infringement resulting from the user’s compliant user of the software (eg infringement for which the provider is responsible)
Some of these indemnities are optional.
Limitation of liability
This section contains various limitations on liability (ie restrictions on when one party is responsible for losses it causes to the other in relation to contracts for the use of the software product). For example, a cap is set on the provider’s liability in most circumstances (eg not in relation to the warranties set out above) and types of loss that the parties generally won’t be liable for are set out (eg indirect loss or loss of profits).
Situations in which parties cannot limit their liability are also highlighted. For example, liability for death or personal injury caused by the party’s negligence.
This section takes into account the restrictions imposed by law on a business’ limiting its liability in relation to consumers. Different clauses within this section are identified as related only to business customers or only to consumers.
Intellectual property rights
This section clarifies who owns and who may use IPRs existing in the software product itself, in content and data input into it, and in content created by it (ie its output).
Proprietary rights to data
This section clarifies that a user owns any content or data that they input into the software product.
If granted, it also sets out the licence provided by users that lets the provider use the data the users input into the software product to improve the software (eg to further train the AI model(s) underlying the software).
Data protection and privacy
Here the AI Terms of Service highlight the parties’ commitments to following data protection laws. For example, the provider’s privacy obligations are identified and a link to their Website privacy policy provided.
Details about responsibility for any personal data breaches occurring in relation to content that a user inputs into the software product are set out. These details depend on your answers to the document interview questions.
Service provision information
This section contains key pieces of information relevant to the provider’s provision of the software product. Lots of the information set out here is information that consumer protection laws require businesses to ensure is available to consumers before they enter into a contract. For example, for sales of digital content such as a SaaS product, information about the product’s functionality and compatibility.
For more information, read the FAQ ‘What other information needs to be provided to customers?’ above.
Circumstances beyond the control of either party (force majeure)
This section contains a force majeure clause. This means that it sets out what should happen (eg how liability will be allocated) if certain events occur that are beyond a party’s reasonable control and which prevent that party from performing its obligations under a contract formed for the provision of the software product. For example, the party that’s unable to perform its obligations will not be liable for such a failure.
General terms
This section deals with various other points of law that govern how contracts under the AI Terms of Service, formed for the provision of the software product, operate. For example:
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restricting how the parties can deal with a contract (eg preventing the parties from assigning their rights or obligations under a contract to others without the other party’s permission or only as allowed by the AI Terms of Service)
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stating that a contract is the entire agreement, ie the contract contains all of the agreement between the provider and the relevant use (ie there are no additional terms)
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requiring that any variations to a contract is in writing and signed
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excluding the Contracts (Rights of Third Parties) Act 1999 or the Contract (Third Party Rights) (Scotland) Act 2017. This essentially means that third parties (ie not the provider or the relevant user) that would otherwise be able to enforce obligations under a contract under the relevant Act cannot do so
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clarifying that a contract is not intended to create a partnership, joint venture, agency relationship, employment relationship, or similar between the parties
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setting out how any notices or other similar communications that are given under a contract should be delivered
Governing law and jurisdiction
This section sets out which country’s legal system must be used to resolve any disputes arising in relation to contracts formed under the AI Terms of Service (ie these contracts’ jurisdiction). This is necessary as the legal systems of England and Wales and of Scotland are different.
Consumers’ ability to enforce some consumer rights within the legal system of other countries of the UK is also noted.
If you want your AI Terms of Service to include further or more detailed provisions, you can edit your document. However, if you do this, you may want a lawyer to review the document for you (or to make the changes for you) to make sure that your modified AI Terms of Service comply with all relevant laws and meet your specific needs. Use Rocket Lawyer’s Ask a lawyer service for assistance.
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Legal tips for software providers
Mitigate the risks posed by AI
Artificial intelligence (AI) is a rapidly developing type of technology with masses of potential for many tasks and industries. However, its rapid progression and expansion is not without risks.
These risks cover many areas of law and are largely tied to the relative opacity that can exist as to how an AI model processes data and produces output from it. For example, a user of a model may be unaware of which personal data, intellectual property rights, or unlawful content are incorporated into output that they create and use.
When dealing with AI, it’s important to be aware of these risks and how to mitigate them. Creating AI Terms of Service that help allocate the burden of these risks can help you mitigate the risks. You should also set out processes for how you and those you work with handle AI - whether you’re developing your own programmes or using existing tools within your business.
If you’re using existing AI tools or models within your workplace, you can create an AI policy to set out workplace rules to help you strategically mitigate risks posed by AI.
For more information, read AI and copyright law.
Sell digital content compliantly online
Selling to business customers or to consumers online brings extra legal requirements that must be met in addition to those applied to in-person sales. Moreover, sales of digital content are subject to various specific requirements. Make sure you’re aware of the rules your business needs to follow. Start by reading:
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Data privacy and cookies (consider also making a Cookie policy)
You can use our Run a business online checklist to help you meet all of the requirements.
It’s also vital that you create a Website privacy policy and publish this on your website, so that website users are aware of how you handle their information and ensure their privacy.
Correctly incorporate your AI Terms of Service into your contracts
If you don’t properly incorporate your AI Terms of Service into contracts with your customers, your customers won’t be bound by these terms.
Correct incorporation is particularly important when dealing with consumers. In commercial transactions, consumers are generally considered to have less bargaining power and relevant knowledge and so the law often seeks to protect them.
If it’s not clear whether terms and conditions (eg AI Terms of Service) were validly incorporated into a contract when it was formed, and a business attempts to rely on one of the terms during litigation, it may be difficult for the business to argue that the terms were incorporated (ie that they make up part of the relevant contract).
You can be more confident that you’re correctly incorporating your AI Terms of Service into your contracts by:
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making sure to bring them to customers’ attention before they form contracts (ie before they click to accept the AI Terms of Service)
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making sure the AI Terms of Service are fair, and
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by making sure they’re accessible
For more information, read Terms and conditions, the Make it legal checklist for this document, and the FAQs above.
Understand when to seek advice from a lawyer
In some circumstances, it’s good practice to Ask a lawyer for advice to ensure that you’re complying with the law and that you are well protected from risks. You should consider asking for advice if:
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you need AI Terms of Service for a software product that:
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can be used by minors
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may be provided via mobile apps
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is downloadable or provided via a durable medium (eg on a disc)
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may be used outside of the UK, or
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was created by multiple collaborating businesses
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you will offer free or discounted trials for use of your software product
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any goods are supplied with your software product
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these AI Terms of Service don’t cover what you need them to
AI Terms of Service FAQs
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What is included in AI Terms of Service?
This AI Terms of Service template covers:
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how a contract for use of the software product is formed to incorporate the AI Terms of Service
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payment of any fees
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warranties and indemnities
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restrictions on how the software product may be used
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how intellectual property rights (IPRs) relevant to the software product are owned and licensed
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how other data (including personal data, ie information about an individual from which they may be identified) is used in relation to the software product
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data protection and privacy considerations
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necessary information about the software product and its provision (eg its compatibility and functionality and its providers’ complaints policy)
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Why do I need AI Terms of Service?
Software products that use AI offer both opportunities and risks. It’s important that businesses providing these products cover their bases legally, commercially, and ethically. These AI Terms of Service help you achieve this by providing a combined software licence, terms of use, and terms and conditions document. The document:
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grants users finite licences (ie permissions) to use a software product in accordance with the AI Terms of Service
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sets out restrictions and rules for the software product’s use, and
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sets out the terms and conditions on which contracts for use of the software product are formed. This ensures that the rights and obligations of each the provider and a user are clearly identified
Providing restrictions on use is particularly important when providing a software product based on, or which incorporates, AI. AI is a rapidly developing area of technology, use of which poses various ethical, legal, and financial risks to those involved (eg by its complicated interactions with intellectual property law and data protection law).
The AI Terms of Service also provide some of the information that businesses must provide to consumers when selling digital content to them via a website.
Creating AI Terms of Service using this template helps a business to protect itself and to meet each of these legal necessities for the sale of a software product without the need for lots of separate documents.
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What is AI?
‘Artificial intelligence’ is a broad term that covers various types of computer programmes designed to mimic human cognition and intelligence. These vary significantly in complexity.
Lots of popular AI models are ‘machine learning’ models (particularly large language models (LLMs)), which use algorithms to learn from many examples of a specific type of content (eg written information or images). This learning process is referred to as ‘training’. Trained AI models can make predictions and extrapolations based on their learning to, for example, generate new content in response to a user’s prompt (ie ‘generative AI’).
AI models can be incorporated into various software products. They may form the basis of a product (eg an AI-powered chatbot that answers users’ questions, like OpenAI’s ChatGPT) or they may power a component part of a software product (eg by predicting how a gap in an image should be filled as a supporting feature of a photo editing product). These AI Terms of Service can be used for software products in either of these categories.
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What risks are posed by software products that use AI?
AI models are often incredibly complex. They tend to be trained on large amounts of data and made up of many communicating data points (ie ‘nodes’). Their capabilities are also constantly evolving. This novelty and complexity means that the output that they produce (ie the content created by the software product, eg text, images, or sounds) is prone to various errors, threats, and legal issues. For example, when users use a software product that incorporates AI, they and/or the product’s provider may be exposed to the risks of:
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breaching laws by data (eg people’s personal information or businesses’ confidential information) being provided to different users and/or in altered forms via the AI model’s output
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breaching laws (eg intellectual property, advertising, or data protection) laws when the AI’s output is used in certain ways (eg if it’s published)
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damaging business resources (eg damaging a technical platform by adding problematic AI-generated code to it)
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relying on incorrect information (AI output is not always accurate)
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perpetuating systemic biases (if an AI model is trained on data containing a particular bias, this bias may inform and be reproduced in its output, perpetuating the original bias when this output is used (eg for decision-making))
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What is ‘software as a service’?
Software as a service (SaaS) is a means of providing a software product whereby users access the product via the internet. This differs from traditional software products, which users generally must download onto their own devices to use, at which point their version of the software is isolated to that device.
SaaS products can be maintained and updated in a centralised manner. They’re often paid for via a recurring subscription service (ie instead of being purchased on a one-off basis).
Due to the large amount of data storage and processing power that’s required to run an AI-powered software product (as well as the various other benefits of a SaaS model), many AI software products are provided as cloud-based SaaS products.
For more information, read Software as a service (SaaS).
These AI Terms of Service are designed to apply to SaaS products.
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What is a software licence?
A software licence is essentially a permission granted to someone to enable them to use a software product.
Traditional software products (eg those provided via a disc or a one-off download) tend to be provided under an end user licence agreement that sets out how the user may use the product.
SaaS products are often also provided with a licence allowing users to use the product in a specified way. Such a licence (eg the licence granted by these AI Terms of Service) generally lasts for a limited period of time, for example, until a recurring subscription is ended.
For more information, read Software licensing and business.
These AI Terms of Service include a software licence.
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Are these AI Terms of Service legally binding?
These AI Terms of Service function as standard terms and conditions. Terms and conditions are intended to form part of each contract between a business and its customers (ie the software product’s users) that is formed in the correct way. This is called being ‘incorporated’ into the contracts. Terms and conditions that form part of a contract are legally binding, as long as they are compliant with relevant laws (eg consumer protection laws).
Terms and conditions may not be legally binding if they’re considered to be unfair.
The Consumer Rights Act 2015 prevents consumers (ie customers not acting in the course of business) from being legally bound by contractual terms that are considered unfair to them. For example, terms that allow a business to alter a contract’s terms without a valid and pre-specified reason, or terms allowing a business to change the prices of goods, would be considered unfair. For more information, read Doing business with consumers and Supply or services B2C.
The Unfair Contract Terms Act 1977 prevents parties in business-to-business transactions from being legally bound by certain types of contractual terms that seek to limit a party’s liability when such terms are considered to be unreasonable.
If unfair or unreasonable terms (respectively) are included in terms and conditions, they will not be implemented, although any terms within the document not considered unfair will still generally be implemented. These AI Terms of Service are designed to avoid creating any unfair or unreasonable terms.
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How do I incorporate my AI Terms of Service into users’ contracts for the use of the software product?
To form part of a contract for the provision of services (eg for the use of a software product), terms and conditions such as those within these AI Terms of Service must be correctly incorporated into (ie included in) the contract.
These AI Terms of Service are designed to be used as a ‘clickwrap’ agreement. This means that a user should agree to (ie accept) the AI Terms of Service by clicking a button or a box to indicate their acceptance of the terms (eg a box titled ‘I agree’ or ‘I accept’). This should form the contract between the provider and this user, assuming all relevant laws and processes have been followed (eg consumer protection laws).
To ensure that the AI Terms of Service are incorporated into the contract, the provider must make reasonable efforts to bring the AI Terms of Service to a user’s attention before the user accepts the AI Terms of Service (ie by clicking the relevant box). For example, you could place a link to the AI Terms of Service headed ‘Terms of Service’ above the button or box that users must click to accept the AI Terms of Service.
A contract formed after a user accepts the AI Terms of Service should incorporate the AI Terms of Service as well as any other terms agreed to before this time (eg regarding price and duration of subscription).
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Do the AI Terms of Service set out payment amounts and subscription lengths?
The AI Terms of Service set out rules regarding how fees and subscription periods can be dealt with when a user makes a contract to use the software product. They do not set out specific fee amounts or subscription period lengths. The software provider must do this separately on their website.
When the AI Terms of Service are accepted and a contract is entered into, this contract should include additional terms regarding fees and subscription length, which are not included in the AI Terms of Service. These terms will be specific to the particular user who is forming a contract. For example, terms setting out how long this user is paying to use the software product for and which fees are due in exchange for this use.
Make sure that such details are agreed to in writing before a user accepts the AI Terms of Service. For example, by the user’s clicking buttons indicating their desired subscription length and fees to reach the website page on which the AI Terms of Service can be accepted. A payment page may follow this (ie a user may be asked to make a payment online after they’ve accepted the AI Terms of Service).
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What other information needs to be provided to customers?
The AI Terms of Service prompt the software product provider to provide key information that a business must, by law, provide when making contracts with customers. For example, basic information about a business’ contact details as well as, for sales of digital content such as a SaaS product, specific information about the product’s functionality and compatibility.
The AI Terms of Service do not contain all information required to abide by the information requirements, particularly consumer rights laws (eg basic information about the provider). It is ultimately the provider’s responsibility to make sure that all necessary information is provided on its website.
For more information, read Online business regulations. Comprehensive lists of key information requirements can be found in the relevant legislation, for example, The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. Ask a lawyer if you need help checking that you provide all necessary information on your website.
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Are users of the software product legally bound by the AI Terms of Service even if they don’t pay to use the software?
One of the things required for a contract to be legally binding is the exchange of ‘consideration’. This means that both parties to the contract must obtain something of value. Usually, this is money, goods, or the provision of services. However, other things can also constitute valid consideration. For example, the promise to do something in future or a business advantage. For more information, read How to form a valid contract.
A business that provides a software product for free generally obtains benefits from users agreeing to use and then using this product. For example, the extra traffic to the business’ website may help them to obtain revenue from online advertising or may help to grow their business’ presence on the internet and may increase how well known their product is. The business may also benefit from the use of users’ data and users’ use of free versions of a product may make them more likely to later decide to pay for use. Any of these advantages may constitute consideration. This means that, if a user of a software product accepts AI Terms of Service in respect of use of a free version of the software product, they may still be legally bound by the Terms they have accepted.
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Are these AI Terms of Service suitable for providing services to consumers?
The law considers consumers to be more vulnerable customers than business customers. Therefore, when doing business with consumers, a business must adhere to additional requirements under consumer protection laws. For example, consumers:
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must be provided with additional information before entering into a contract
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often have a right to cancel a contract that they’ve entered into within a 14-day ‘cooling off period’
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have more protections than business customers regarding the degree of quality and fitness for purpose that a supplier of services must guarantee
For more information, read Doing business with consumers, Supply of services B2C, Consumer rights, and E-commerce between businesses.
These AI Terms of Service comply with consumer laws and so can be used to provide software products to consumers. Certain terms within the AI Terms of Service are identified as applying only to business customers or only to consumers, to meet the relevant requirements.
The AI Terms of Service also highlight consumers’ cancellation rights as they apply to the supply of digital content (eg to a software product supplied via a SaaS model). The AI Terms of Service state that, by agreeing to the AI Terms of Service, a user is conveying a request that the business providing the software product provides them with access to it immediately after their agreement to the AI Terms of Service, and the user, therefore, loses their right to cancel. This means that the user can access the software product straight away and that the provider can generally retain their payment if, after a little use, a user wants to stop using the software product (as far as is allowed by the AI Terms of Service).
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