Any venture into the world of ecommerce, be it an online store, app, marketing endeavor, or indeed any scenario when you’re selling your goods or services to online customers, has unavoidable legal consequences.
As a savvy entrepreneur, you’ve probably anticipated the need to make your website not only user-friendly, but also compliant with legal requirements.
The different legal documents, however, may prove confusing even for the most business-minded among online business agents. Further, their applicability and effects vary from jurisdiction to jurisdiction, making the matter even more complicated, since online commerce is generally a global endeavor.
Here’s a breakdown of the three most common legal documents and statements you should have on your website or mobile app and how they differ from one another.
In order to stay compliant, the Federal Trade Commission advises website owners to review and adhere to their own privacy policies, or they could face legal action. State law may also require that online entities have privacy policies in place.
The EU’s General Data Protection Regulation (GDPR) imposes strict penalties on companies that do not protect the privacy of EU citizens accessing websites, regardless of where those websites are located.
2. Terms and Conditions
In the case of an online store, the terms and conditions determines what will happen in the event of a sale. Essentially, it enables you to structure your return policy, shipping deadlines, and any other details that are essential to the transaction.
While your online store may display a product with a price attached, the terms and conditions offer the “fine print” as to what actually occurs when a user surfing your website decides to purchase and wants to enter their credit card information.
Your legal policies should be tailored specifically to your website, so it’s crucial that you avoid the temptation to copy and paste your competitor’s legal policies!
The FTC does not require you to have a terms and conditions document on your website; in fact, it’s entirely possible, from a legal standpoint, to do business without one. However, doing so is akin to making a handshake deal in real life versus having a written contract. With a handshake deal, you’re taking the other party at their word that they will uphold their obligations.
Building a customized terms and conditions agreement allows you to set the rules of your site, be it establishing guidelines for proper user behavior on your discussion forum or signing up for a free trial of your online app.
Although many people are said to ignore disclaimers because they appear so frequently, they are an important part of business correspondence. They are also a common sight on websites to remind users of the limitations of the service provided.
An excellent example of a disclaimer is found on most law firm websites, stating that the information is of a general nature only and not to be used as legal advice. The intent of that kind of a disclaimer is to prevent someone from suing a law firm after suffering harm from following general advice they received from the site.
Disclaimers vary depending on the nature of the product or service sold. Most licensed professionals, including lawyers and doctors, must adhere to specific rules about advertising their services. Otherwise, they could be faced with losing their licensure or sanctions from the licensing body.
Non-licensed entrepreneurs who sell a particular type of product, such as health supplements, must adhere to specific FDA guidelines that prohibit sellers from making unsupported health claims. Whenever you sell a product online, it’s essential to review the legal body that governs your industry so you can generate a disclaimer unique to your site that limits your liability.
Having a disclaimer for your website will limit or prevent legal liabilities and claims in the event that a user misinterprets your site content.
In order to decide what kind of information to use in a disclaimer, it’s a good idea to do a self-assessment of how your website will be, or could be, used. Upon consultation with a lawyer, you may want to include any potential risks to users in a disclaimer.
For example, if you are a third-party reseller of consumer goods, you may want to affirm that you do not take responsibility for the condition of the goods once shipped by the third party. In essence, a disclaimer is intended to limit liability, but you should speak with a lawyer if you have significant concerns about the ultimate well-being of those who use your website.
Before you launch your website, you should use these documents to both comply with the law and protect yourself from liability. Taking these proactive steps, even when it’s not explicitly required, can help ensure you’re on firm ground in the event of a legal dispute and that you are offering a positive image of professionalism to your users.