What are some guidelines and examples for designing usable legal terms for web sites? I know that most users don't read it, but are there innovative ways to improve readability and presentation of these (traditionally) boring documents?
Not an answer based on studies but on personal experience, and some research I did on this topic recently:
General aspects of Terms and Conditions:
Legal documents can also be used to increase trust
Especially in eCommerce it's vital to the success of a business that customers trust the company. Tons of money is spent trust seals but customers might be scared away if they look up the companies' legal docs. Clearly understandable legal docs do have the potential to increase trust if customers feel they understand them.
Are 'standard' legal docs really a problem?
Probably not significant we might think. In my experience (based on looking at web analytics data of several companies) less than 2% of the users look at these legal documents (2). On the other hand a 1-2% conversion rate increase of an eCommerce site is really hard work. Small change but relatively high impact I'd say.
What can we do for better legal documents?
(2) Research on how little users actually read - according to this research less than 10% of longer documents: http://www.useit.com/alertbox/percent-text-read.html
Edit March 2013:
Just stumbled upon an interesting TED talk ranting about legal jargon in legal to non-legal conversations, contracts etc. and wanted to share it here: http://www.ted.com/talks/alan_siegel_let_s_simplify_legal_jargon.html
Edit Oct 2015:
Found another very nice example of pleasent Terms & Conditions at Zapier: (Source: https://zapier.com/terms/)
As far as placement, depending on your industry, it may need to be a link in the footer of every site page. Giving it a dedicated page rather that a modal/pop-up is good for SEO.
As far as structure, write it like any other well-designed document. Bold for headings, paragraphs chunked and grouped in logical order, contact information.
Example from former company:
Sometimes even a bit of irony could help to make these pages less boring. For instance, the only Terms & Conditions document that I read entirely and with interest is the "Legal Mumbo Jumbo" of Very Good Emails by Mail Chimp http://reallygoodemails.com/legal-stuff/