If you’re launching or running a SaaS (Software-as-a-Service) platform, you’ve probably heard you “need a Privacy Policy and Terms of Service.” But what do they actually do—and how are they different?
The truth is, these two legal documents serve distinct and equally essential roles in protecting your business, your users, and your compliance posture. Failing to get them right can lead to customer disputes, platform bans, or even regulatory fines under laws like the GDPR, CCPA, or FTC Act.
Let’s break down what every SaaS founder, product manager, or in-house counsel should know.
📜 What Are Terms of Service?
Your Terms of Service (TOS)—also called Terms and Conditions or User Agreement—acts as a contract between your company and your users. It governs how your software can and cannot be used, sets limitations on liability, and gives you recourse if a customer misuses your platform.
Key Clauses You Should Include:
✅ Account creation and user eligibility
✅ Payment terms, renewals, and cancellations
✅ Intellectual property ownership
✅ Prohibited uses and behavior
✅ Limitation of liability and disclaimers
✅ Dispute resolution and governing law
🔐 What Is a Privacy Policy?
A Privacy Policy is legally required in most jurisdictions and tells users how you collect, store, use, and share their personal data.
This is critical for compliance with:
GDPR (EU)
CCPA/CPRA (California)
Virginia CDPA, Colorado CPA, and other state laws
FTC data protection standards
Key Disclosures to Include:
✅ What personal data you collect (email, IP address, usage data)
✅ How and why you use the data (analytics, marketing, functionality)
✅ Who you share it with (third-party tools, cloud providers)
✅ Data retention and user rights (access, deletion, opt-out)
✅ Cookie tracking and consent
✅ Contact info for data requests
💡 Pro Tip: Keep it updated. Privacy laws change constantly, and stale policies are a red flag to regulators and savvy users.
🛡️ Why You Need Both
Terms of Service protect your business.
Privacy Policy protects your users—and ensures compliance.
If you only post one, or confuse the two, you risk breaching regulations and eroding trust with your users. Together, these documents form the legal foundation of your platform’s customer relationship and regulatory compliance.
👩⚖️ How We Can Help
At Shperun Law, we draft customized Terms of Service and Privacy Policies for:
SaaS platforms & marketplaces
AI and Web3 companies
Mobile apps and APIs
Startups preparing for funding or acquisition
📞 Schedule a flat-fee review or full legal package to make sure your documents do what they’re supposed to—protect your product and build user trust.
Olga Shperun, Esq
+1 (571) 274 - 6481