How we determine fairness
TermScout certifies contracts as being fair from the point of view of the typical customer.
Our proprietary method for determining contract fairness is based on our collective legal expertise and analysis of thousands of contracts.
In order for a contract to be certified by us, it must:
- Meet the Minimum Standards, and
- Have an overall TermScore of at least 60/100.
The most common Minimum Standards are set forth below (but these vary across industries):
|Limitation of Liability||Offers reasonable limitations on each party’s liability (with appropriate carve-outs).|
|Warranties||Offers meaningful warranties.|
|Your Confidential Information (CI)||If company has access to your CI, it adequately protects it from unauthorized use or disclosure.|
|Your Intellectual Property (IP)||If company has access to your IP, its license is narrowly tailored.|
|Your Indemnification of Company||If company requires you to indemnify it, indemnification is narrow and reasonable.|
|Company’s Indemnification of You||Company indemnifies you against third-party IP claims.|
|Changes to Contract||Contracts cannot be changed without notifying customers.|
|Data Privacy and Security||If company will access, store, or otherwise process any personal, health, financial or other sensitive data, it (a) clearly articulates what data it collects, (b) takes reasonable measures to protect that data from unauthorized disclosure, and (c) clearly articulates how it uses that data and who it shares it with.|
For the most important provisions in a contract, including the Minimum Standards and others, we assign a value based on the fairness of that provision. Every provision is given a weight based on the importance of such provision to the average customer. We use market research and legal experts to determine the weights assigned.
For more information on how we score contracts, visit our Methodology page.
Call To Action
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Just because a company has certified fair contracts does not mean that you should sign its contracts. Your facts may vary from those we envisioned when preparing our reviews. We are not a law firm and no one at TermScout does or will serve as your attorney. We are not a replacement to hiring an attorney. Our reviews offer a good way of getting a general feel for what’s in a company’s contracts, but are not a good tool to base large purchasing or mission-critical decisions on. Reviewing and scoring contracts is inherently subjective and is based mostly on our opinions. If you are making a substantial purchase, using a service with high risk factors, or using a service for mission-critical aspects of your life or business, you should consult an attorney.