Terms of Service and Cookie Policies: What You Actually Need

You're launching a website. Your lawyer friend says: "You need a Terms of Service and a Cookie Policy."

You nod. "Sure. What's the difference?"

Silence.

Here's the truth: most people don't know the difference. They use the terms interchangeably, or they think it's all just "legal stuff" that covers everything.

But Terms of Service and Cookie Policies serve completely different purposes. This guide explains what each one does, when you need them, and how to implement them correctly.

What is a Terms of Service?

Your Terms of Service (also called Terms and Conditions or Terms of Use) is a legal agreement between you and your users. It governs how they can use your website, app, or service.

Think of it as the rulebook for your platform. It tells users:

• What they can and cannot do
• What rights they have
• What rights you reserve
• What happens if they break the rules
• How disputes will be resolved

The Terms of Service protects you. It limits your liability, sets expectations, and gives you legal grounds to terminate abusive accounts.

What Should Be in Your Terms of Service

A complete Terms of Service typically includes:

1. Acceptance of Terms
"By using this service, you agree to be bound by these terms."

2. User Accounts
Registration requirements, account security, who's responsible if an account is compromised, and how accounts can be terminated.

3. Acceptable Use
What users can and cannot do. No spamming, no illegal activity, no harassment, no scraping data without permission, etc.

4. Intellectual Property
Who owns what. You own your platform and content. Users own their content but grant you a license to use it (if applicable).

5. Payment Terms (if applicable)
Pricing, billing cycles, refunds, chargebacks, what happens if payment fails.

6. Disclaimers
Limitations on warranties and guarantees. "We provide this service as-is. We don't guarantee it'll work perfectly 100% of the time."

7. Limitation of Liability
How much you can be held liable for. "If something goes wrong, you can't sue us for $10 million."

8. Termination
How and when you can suspend or terminate accounts. "We reserve the right to terminate accounts that violate these terms."

9. Governing Law
Which jurisdiction's laws apply. "These terms are governed by the laws of [State/Country]."

10. Dispute Resolution
How conflicts will be resolved. Arbitration? Mediation? Which courts have jurisdiction?

When Do You Need a Terms of Service?

Technically, a Terms of Service isn't always legally required. But it's highly recommended—and often essential—if you:

• Have user accounts or memberships
• Sell products or services online
• Allow users to post content or interact with each other
• Offer subscriptions or recurring billing
• Want to limit your legal liability

In other words: if you're running any kind of business online, you need a Terms of Service.

What is a Cookie Policy?

A Cookie Policy (sometimes called a Cookie Notice) explains what cookies and tracking technologies you use on your website, why you use them, and how users can control them.

Think of it as transparency about tracking. You're telling users: "Hey, we're keeping notes about your visit. Here's what we're tracking and why. Here's how you can stop it."

What Should Be in Your Cookie Policy

A complete Cookie Policy should explain:

1. What cookies are
A simple explanation for non-technical users. "Cookies are small text files stored on your device that help us remember your preferences."

2. Types of cookies you use

• Essential cookies: Required for site functionality (login sessions, shopping carts)
• Analytics cookies: Track how users interact with your site (Google Analytics, Mixpanel)
• Advertising cookies: Used for targeted ads (Facebook Pixel, Google Ads)
• Functional cookies: Remember user preferences (language, theme)

3. Third-party cookies
Cookies set by external services you use (Stripe, Intercom, Cloudflare, etc.).

4. Purpose of each cookie
Why you're using it. "We use Google Analytics to understand which pages are most popular."

5. How long cookies last
Session cookies (deleted when browser closes) vs. persistent cookies (last days, months, or years).

6. How to control cookies
Browser settings, opt-out options, cookie preference center.

7. Link to Privacy Policy
For more details on data handling.

When Do You Need a Cookie Policy?

A Cookie Policy is legally required in many jurisdictions if you:

• Use cookies or similar tracking technologies (even just Google Analytics)
• Have visitors from the EU (GDPR requirement)
• Have visitors from California (CCPA/CPRA requirement)
• Use third-party services that set cookies (analytics, ads, chat widgets)

Key point: Almost every modern website uses cookies. Which means almost every website needs a Cookie Policy.

The Key Differences

Here's how Terms of Service and Cookie Policies differ:

Aspect	Terms of Service	Cookie Policy
Purpose	Governs the relationship between you and users	Discloses tracking technologies used on your site
Focus	Rules, rights, responsibilities, liabilities	Cookie usage, data collection via cookies, user controls
Legal requirement	Recommended but not always required	Required by GDPR, CCPA if using cookies
User action	Users must accept terms to use service	Users must be informed and given control
Placement	Footer link, shown during signup	Footer link + cookie banner

The simplest way to think about it:

Terms of Service: The rules for using your platform.
Cookie Policy: Transparency about what you're tracking.

How They Work Together

For most online businesses, you need three core legal documents:

1. Privacy Policy – How you collect, use, and protect personal data
2. Terms of Service – Rules for using your platform
3. Cookie Policy – What cookies you use and why

These documents should reference each other:

• Your Privacy Policy should reference your Cookie Policy for details on tracking
• Your Terms of Service should reference your Privacy Policy for data handling
• All three should be easily accessible from your website footer

Implementation Checklist

For Your Terms of Service

• Link it in your website footer on every page
• Show it during account signup with an "I agree" checkbox
• Include a "last updated" date at the top
• Notify users of material changes via email
• Keep a version history of changes
• Review annually or when your business model changes

For Your Cookie Policy

• Display a cookie banner when users first visit
• Link to the full policy from the banner
• Provide opt-out options for non-essential cookies
• List ALL cookies you and third parties use
• Explain cookie lifespans (session vs. persistent)
• Update when adding new tracking tools (new analytics, pixels, etc.)

Regional Compliance Requirements

GDPR (European Union)

• You MUST get explicit consent before setting non-essential cookies
• Pre-checked boxes are NOT allowed
• Granular control required (users can accept some cookies, reject others)
• Cookie Policy must be clear and accessible

CCPA/CPRA (California)

• Cookie disclosure required in Privacy Policy
• "Do Not Sell My Info" link required if selling data
• Right to opt out of cookie-based tracking

ePrivacy Directive (UK & EU)

• Applies specifically to cookies and similar technologies
• Consent required before storing/accessing cookies (exceptions for essential cookies)
• Clear information required about what cookies do

Common Mistakes to Avoid

Terms of Service Mistakes

• Using a generic template without customizing to your business
• Not updating terms when your business model changes
• Failing to get explicit acceptance during signup
• Not notifying users of material changes
• Including unenforceable provisions (varies by jurisdiction)

Cookie Policy Mistakes

• Not listing all cookies (including third-party ones)
• Setting cookies before getting consent (for non-essential cookies)
• Using vague language like "we may use cookies"
• Not providing opt-out options
• Forgetting to update when adding new tracking tools

The Bottom Line

Terms of Service and Cookie Policies serve different purposes, but both are essential for most online businesses.

Terms of Service protect you legally and set clear rules for how users can interact with your platform.

Cookie Policies are required by law if you use tracking technologies—which almost everyone does.

Don't skip either one. Get them in place before you launch. Keep them updated as your business evolves. Make them accessible from your footer. And when in doubt, consult a lawyer who specializes in internet law.

Your future self will thank you.