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Legal Issues in Online Business

by alex. (follow)
Business (103)      Website (9)      Internet (7)     
Image source: Flickr - tamuc

If you're doing business on the Internet, chances are you have a website you use to provide information, products, or services to your customers. As your portal to current and future customers, it's therefore crucial to have any potential legal issues with your website sorted from the beginning. Here are the most common problems website owners tend to run into -- and how to solve them without spending a lot of time or money.

Your URL

The first step of building any website is registering the URL. It's a simple enough process, but businesses often forget to check a few things. For example, is the name you're intending to use already being used by someone else, or even trademarked? Can it be trademarked?

The last thing you want to do is spend thousands of dollars and even more time building your brand and website around a name and URL that you'll have to change later because someone else was already using the name or had it trademarked. And you certainly don't want to discover later on down the track that your name and brand cannot be protected with a trademark.

Therefore, before choosing your name and URL, do both a trademark search and a business names and organisations search.

Website ownership

The second step in creating a website is having a website designed and then built, unless you have the skill and time to do it yourself. A web development contract will be drawn up to govern the relationship between you and your developer, and you absolutely must read and understand it. Ideally you should provide it.

The most important clause in this contract pertains to copyright. The web developer should not control the copyright to your website after the developer has been paid in full -- which some developers try to do. Make sure the contract clearly states that the website will be wholly yours once it is finished.

Similarly you should have the developer warranty that their work for you doesn't infringe on anyone else's copyrights. The last thing you want is to find yourself on the hook if it becomes clear that your developer lifted the underlying code from some third party. Your developer should indemnify you against liabilities or costs which result from breaching this warranty.

Check your copyrights

On a similar note, be very careful you have a legal right (a license) to use any images, text, video, or other media on your website. They should either be created by you or purchased from a commercial stock photography or stock video provider, otherwise you will likely be breaching someone's copyright and potentially liable for thousands or more dollars in damages.

Documents you must provide

As a rule you should plan on displaying at least two legal documents on your website: a Website Terms and Conditions, and a Privacy Policy.

The Website Terms and Conditions is standard practice even if you do not sell anything. If you do sell products or services via your website, a Terms and Conditions (specific to your type of business) is required. The Terms and Conditions simply sets out the relationship between you and your visitors, as well as the conditions under which people can access it. If you sell things online, your Terms and Conditions also specifies information like your cancellation and refund policy.

Simply having this agreement in place lets you limit what visitors can do with your website's intellectual property and information, as well as minimise the risk that visitors will take legal action against your business due to their using your website.

A Privacy Policy, on the other hand, is mandatory if you collect any personal information from your users. The threshold for 'personal information' is so low that in fact anybody with a website should always have a privacy policy: simply collecting people's email information as part of a website contact form is enough to bring you into territory where you must have a Privacy Policy.

The Privacy Policy explains how you respect your users' privacy, setting out what information you gather from your users and how you will secure and use that information. It's a fairly simple disclosure document so users know what level of privacy they can expect, but it's both mandatory for most websites and also simply a good idea for reinforcing your customers' confidence in your business.

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