An acceptable use policy (AUP) is the list of rules that an Internet Service Provider (ISP) will require any user to abide by, be they a single person, a company or any other entity. Most ISPs will require acceptance of an AUP before an account can be purchased through them.
An AUP is often written in legalese and may be daunting to the uninitiated. The legalese can be lengthy and convoluted and may at first glance appear designed to discourage reading.
AUPs are generally an ISP's first stage method for liability reduction. If prosecution of the ISP occurs due to the illegal behaviour of a user, the ISP can point to their AUP and claim no responsibility. Depending on the jurisdiction this may cut no mustard with the judiciary.
An AUP will also be used by an ISP to reduce their liability to their user, whether that be due to failed service by the ISP, or access to undesirable content through the Internet. Some common clauses in AUPs will indicate that the ISP has no control over the content of various parts of the Internet, especially the usenet. Other clauses will state that the ISP cannot guarantee continuity of service.
AUPs will also outline the basics of netiquette for the ISPs users, indicating what behaviour the ISP considers rude. In conjunction with netiquette an ISP will often use its AUP to outline behaviour which it considers detrimental to its ability to continue providing adequate service to its customers.
In addition to the list of rules in an AUP there will occasionally be a list of penalties for violation of the rules. These will generally be either removal of the user account or suspension of that account.
An AUP can be considered to be very similar to an End-User License Agreement (commonly known as a EULA) for software. If you don't read it before you agree to it you've only got yourself to blame!