It’s long been said that “I agree to the terms of service” is the biggest lie on the internet. And even if you do read them, many TOS are so ridden with legalese that you practically need to be a lawyer to understand them. Also, as I wrote in a gloomy post last weekend, users have no choice but either agree to the terms offered by a web app or simply not use the service at all.

But a new project called TOS;DR wants to change that. The site aims to give more power to users by summarizing terms of service, flagging potential issues and rating apps on a scale from A (the best) to E (the worst).

So far the only company with an E, the worst possible rating, is TwitPic, which reserves the rights to sell users’ photos to news agency without giving the photographer a cut.

Project lead Hugo Roy tells me that he considers Wikipedia to be an exemplary service, though it hasn’t been rated by TOS;DR. He says both Wikipedia’s short, clear summary of its TOS and its practice of soliciting feedback from users before a change in terms should be widely adopted as best practices for the web.

The project hatched about a year ago at the annual Chaos Communication Camp event in Berlin as an outgrowth of the Unhosted project, which is a system for building web apps that leave users in control of their data. Roy says the team was inspired in part by Creative Commons, which provides plain English summaries of each license it offers, as an influence on TOS;DR. The sites’ goals are to highlight issues in particular TOS, educate users about the importance the agreements they enter into with web companies and, eventually, to track and influence changes to TOS.

The ratings, which Roy explains are based on German energy efficiency ratings for appliances, still feel rough to me. For example, GitHub gets a C but the seemingly much worse Delicious gets a D. Still, it’s a good start. I like the idea of projects like Unhosted, which I’ve written about elsewhere, but activist users have had more success in pressuring companies like Dropbox and Facebook to change their TOS than getting users to defect to privacy centric systems like Diaspora.

Roy says the site wasn’t actually ready for launch but it started getting media attention in Germany and has now hit Hacker News a couple times, so the team isn’t keeping it a secret anymore. The plan is to officially launch at Campus Party 2012 later this month.