This question was brought up in the last Google Webmaster Help Hangout with John Mueller, and here is his response.
Well we will crawl and index those pages but it’s not that we have any kind of special algorithm that seeks out terms of service pages and says oh this website has a terms of service so it must be a good one. This is content that anyone can copy and paste from somewhere so it’s not necessarily a sign that because you have a terms of service this must be a higher quality website.
From our point of view it doesn’t really matter. For your users, I don’t know, it that might depend on what type of services your website is offering. So if you’re selling something and you don’t have your address or your terms of service anywhere on the homepage, then that’s something where a user might kind of look at it and say I don’t know if this is really a legitimate business or if it’s some fly-by-night spammers is just trying to show up in search.
But that something more on the user side, that’s not something where say we say Googlebot is looking at the terms of service and making sure it’s written correctly.
In the Google Quality Rater’s Guidelines, it does mention things like having about us page and contact details, but it doesn’t go into privacy policies or terms of service.
Bottom line, depending on the type of site you have, it is good user experience to have these pages, but it won’t give you that extra boost in the rankings.
Here is the video.
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