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The Key Legal Documents for an Online Business

Any online business should and must have a number of different legal documents prominently visible. This is for two reasons. First, some of them are required in order for you to comply with the law. Second, they also ensure your customers can see that you are fair and honest in your dealings with them. Which documents are required will vary depending on your precise business type, but the most common ones are a Privacy Policy, a Website Terms and Conditions, a Website Disclaimer, and a Website Contract used when working with a web designer.

Your Website Contract

Some of the most commonly overlooked issues when hiring someone to design your website are the legal questions surrounding intellectual property. In some cases, the designer will have good reason for retaining intellectual property to your web design or parts of it, such as if they have a proprietary technique or system which they are only prepared to license rather than sell outright. However, if possible, you should ensure that the contract stipulates you will retain intellectual property rights to the site once you’ve made the final payment to the designer.

This is regulated in the Website Contract, which protects your rights down the line while also ensuring your existing IP is protected. A good Website Contract will also include an indemnity clause, stipulating that in the event your designer copies something from another site (and thereby violates the website owner’s rights), then you are protected against the other website owner taking action against you.

Contractor Agreements

As with your web designer, if you are hiring other contractors to do work for your business, then you will want to have formal agreements in place with them. These documents should be clear and simple, but set forth everything needed to make sure you’re “on the same page” as each other – outlining the technical skills and services they will provide, how the project will be managed, who will own any IP involved, questions of confidentiality and liability, warranties, and more.

Your Privacy Policy

Privacy Policies are brief legal notices stating you’ll keep secure any personal data which you collect from visitors, and that you will not misuse this data. From the perspective of a website visitor, the key point is that (if you collect an email address from them) you won’t send unsolicited emails (“spam”) or give out or sell their email address to another party. You should also be sure they’re aware that you’ll keep their information protected, private, and secure.

From a legal perspective, you are required by law in Australia to have a Privacy Policy if you collect any personal data at all from visitors or customers. Not only do you have to have a privacy policy if you sell goods or services (and therefore collect information about your clients), but you also need one even if you just collect email addresses in a “Contact Us” form. Similarly, you need to have a Privacy Policy if you’re collecting information without it being clear to your visitors, such as if you use “cookies” to analyse who visits your site.

According to Australian law, your Privacy Policy must mention the information you collect, how you will use it, and how you will store it and keep the information secure. In general, you must collect only the information needed to conduct business and no more.

The situation is a little different in the US. There’s no general United States-wide law requiring people who do business in the US to post a Privacy Policy, but certain states, such as California, have laws on the books that are very similar to Australia’s: California state law requires people collecting personal information on California residents to post a Privacy Policy. Similarly, Nebraska and Pennsylvania consider it a deceptive or fraudulent business practice to put misleading statements in a Privacy Policy published on the web.

Additionally, if you collect information about children below the age of 13, then you fall under the jurisdiction of the Children’s Online Privacy Protection Act, and you will have to make certain explicit disclosures. Contact a lawyer for more information.

Your Website Terms and Conditions

If you offer any kind of professional advice, or if you sell services or goods, then you need to have a Website Terms and Conditions. These state explicitly which terms any visitors, customers, and users agree to when they buy from you or browse your website.

If you sell exclusively to the US, you are not required to have Terms, and some people still don’t have them. But, even in the US, the Uniform Commercial Code, Children’s Online Privacy Protection Act, and Digital Millennium Copyright Act require you disclose certain things for any kind of transaction, and the Terms and Conditions are an excellent place to do that.

Terms and Conditions do several things. They protect you from customers who claim they suffered losses as a result of using your services or products, or from your website content. They also protect you against website visitors claiming damages as a result of viruses or copying your content.

The more complex your site, the more involved and comprehensive your Terms will likely be. However, Australian Consumer Law requires websites selling services and products not only to have a Terms and Conditions, but also to include certain things in their Terms. Specifically, if you are selling online, you must include:

  1. A statement in your Terms to the effect that you are in compliance with the Australian Consumer Law
  2. Your refund policy
  3. Your guarantee details
  4. If you provide a warranty, details of the warranty.

Because the disclosures required for a US-based business depend heavily on what kind of business you operate and what you sell, it’s best to engage an attorney to craft your Terms when selling to US customers. At the minimum, you’ll probably require information about your warranty as well as personal information if you collect it from those under age 13.

Your Website Disclaimer

Finally, anyone launching a website should have a Website Disclaimer. This document protects you against general liability like content accuracy, copyright infringement, defamation, or more. After all, you never know who might visit your website, or whether they might try and devise a reason to sue you. The moment you start your business online, you’re exposed to litigation. Stop it by using a strong Website Disclaimer.


Resources:

http://www.oaic.gov.au/privacy/privacy-resources/privacy-guides/guide-to-developing-an-app-privacy-policy#APP-1

http://legal123.com.au/how-to-guide/how-to-write-terms-and-conditions/

About Alex Pejak

Alex Pejak is an economist currently working on a few projects in Australia. She is interested in topics related to project management and business improvement.

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