18 January 2021
If you subscribe to apps, it's not uncommon to receive emails regarding updated Privacy Policies or Terms & Conditions (T&C).
Most agreements contain a date of when the revised terms became effective or finalized. Often generally referred to as the effective date, this is traditionally the date contract terms become enforceable.
While the effective date has significance in traditional contract law, its function in the digital age is more informative than legal.
Here's an explanation of the effective date and what it means for the legal agreements of your website or mobile app, regardless of what those agreements are:
Traditional contacts are unique from digital agreements in that they are normally very specific to the parties.
For example, if you hire a contractor to build an addition to your home, you likely have a contract that describes the work to be finished and how much you would pay for it. The contractor may have the authority to delegate work to other specialists (like electricians or plumbers), but the two of you are the only parties to that contract.
In these types of transactions, it's critical that the parties when their obligations begin.
So, what is the effective date?
Generally, the effective date indicates that beginning to the mutual obligations.
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In the example above, the contractor would have no obligation to start building your addition until both of you agreed to the terms of the contract. You would also likely have a date in the contract when work should start and finish.
Additionally, there would ideally be payment terms too, such as a deposit before work begins and when the balance of full payment is due.
Many times the agreement is dated and there's a clause that makes it effective on the date it is signed.
If there are two or more signatures required, the contract becomes enforceable on the day the last party signs it. After all, there's no obligation until everyone involved in the contract affixes their signature.
The effective date is present in most types of contracts.
In the typical real estate sales form, there are different dates for an offer to purchase and the acceptance of the seller. Since there's no sale unless the offer is accepted, that contract would be considered effective on the date of acceptance.
There are also circumstances where obligation dates are easily assumed too.
Tizer Botanic Gardens and Arboretum hosts events in its unique botanical atmosphere. When vendors wish to use its web site, there is a contract executed that contains the date of the event and a release of liability for Tizer.
In this case, there is no obligation from Tizer until the date of the event and likewise, no need to protect it from liability either. This is despite the fact that the date the vendor signs the contract and the date of the event could be different from one another.
Websites or mobile apps are not as straightforward as sales or vendor contracts.
That is why the concept of an effective date is handled differently for digital transactions.
Each user will have to accept the terms when they download the app or register for your website but the terms they read will not be different from the ones read by a user one hour or even one minute previously.
For these agreements, these dates are not indicated by "effective date" but "last revision" or "last updated."
There's no industry standard for how the effective date is presented. Companies have different preferences.
Amazon.com is very thorough with its update announcements.
On its "Privacy Notice" page, it indicates an update that occurred on March 3, 2014. In addition to this date, it also offers a link to see the changes.
The date is listed at the top of the agreement with a link to different privacy features. Like Amazon.com, RescueTime prefers being thorough:
Facebook takes a middle ground here.
Other companies are very clear on effective date but do not feel the same need to be thorough.
There are also companies that seem to hide the effective date.
How you present the effective date for your app could depend on several factors.
Netflix and Apple, for example, tend to be pretty good about sending emails when they update their agreements. It's likely that is why they do not feel like they need links to changes, like Amazon.com does and to some extent, RescueTime.
If your app handles a lot of private information, you likely want to make the effective date as conspicuous as possible. Also, since your users may not always read the update emails you send them, adding a link like Amazon.com prefers to do is likely a good precaution.
As stated previously, effective date is not nearly as crucial with digital transactions and apps as it is with traditional sales, service or vendor contracts. In the latter group, a lack of an effective date leaves it vague as to when obligations begin.
When a user downloads your app, there's an immediate record of when they accepted the agreements associated with the download.
Dates also show that the agreements are current with the law.
Even then, you have companies who do not put effective dates in their agreements.
RescueTime merely states that it can change the Terms of Service at any time and post the amendments on its website. Since it has not updated the document in a while, there's no indication how it announces these changes. It's likely they occur through a website link or email.
Keeping users in the loop and coming off as straightforward doesn't hurt. Dating your legal agreements helps with that transparency.
Whether you wish to be detailed like Amazon.com or remain general like Netflix depends on the type of user information you collect. The more sensitive and private it is, the more conspicuous you likely wish to be with the effective date and the changes done to the agreements.
This article is not a substitute for professional legal advice. This article does not create an attorney-client relationship, nor is it a solicitation to offer legal advice.