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If you are running a business or considering starting one, you will likely want to set up a website or mobile application. When doing so, it is important to consider the legal documents you need to publish to protect your business. This article sets out the three most important online documents that you should include.

Terms of Use

Your website’s terms of use is a document that applies to any person who visits your site, and should be easily accessible. Generally, the terms spell out in plain English the contractual relationship between you or your company and the visitor.

What is the Purpose of Terms of Use?

Primarily, your website’s terms of use protects your intellectual property, and any other information contained on your site, along with an express statement that none of your material or content can be reproduced elsewhere without your permission.

You would expect to see clauses limiting liability and disclaiming liability for any implied warranties. That is, promises you make about the website itself rather than the services you provide. A prudent IT lawyer would also recommend that you spell out the type of conduct permitted by users.

What About Information Provided by a User of the Site?

Another function of a website’s terms of use is to make clear that any visitor to your site who posts any information – whether a review, comment, email address by way of general inquiry – grants you the right to use that content. This is known as “user content”. It is sensible to include in your terms of use a warranty that the user has the right to post the content, and that the content does not infringe any rights of any third party.

Privacy Policy

We are often asked here at LegalVision: “But does my website really need a privacy policy?” The short answer is: “Depends!”

Do the Australian Privacy Principles Apply to Me?

Schedule 1 of the Privacy Act 1988 contains the Australian Privacy Principles (APPs). The APPs apply to all “APP entities” such as private sector and not-for-profit organisations with an annual turnover of more than $3 million. So, if your business doesn’t meet these requirements, it is likely that you will be exempt from having a privacy policy. However, it is best first to confirm whether you are an “APP entity” or not. The APPs also outline how those entities must handle, use and manage personal information. 

What Should My Privacy Policy Contain?

As a general rule, your privacy policy should clearly set out to any user of the site the following:

  1. What personal information you intend to collect;
  2. What personal information you intend to collect;
  3. Exactly how you intend to collect it; and
  4. How you will use the information and whether you will disclose it to any third parties.

The type of personal information you collect will vary depending on what services you offer on your website. You may collect personal information such as an individual’s:

  • Name,
  • Postcode,
  • Contact details including street address, email address and telephone number,
  • Marital status and anniversary,
  • Date of birth, and
  • Preferences and opinions.

Your privacy policy must also outline the manner in which you intend to collect the personal information. Typically, a business collects and processes data through an analytics provider such as Google Analytics. If so, it is common for your provider to insist on including particular language in your Privacy Policy as part of the service provided.

The third essential element of your privacy policy is to outline how you intend to use the personal information, and whether you intend to disclose the information to third parties. Depending on the nature of your business, it is generally permissible to collect personal information for the following purposes:

  • Business development;
  • Contacting and communicating with your users;
  • Market research including direct marketing;
  • Running competitions, giveaways and other promotions;
  • Internal record keeping;
  • Sending promotional information about third parties that you have reason to believe your users are interested in.

Of course, it is also important your privacy policy clearly includes an email address that a user can email and unsubscribe to stop receiving further communications from you.

Terms and Conditions

The Terms and Conditions of your Website or Application are, in some respects, the single most important document you need. While your terms of use apply to any visitor to your site, your terms and conditions explicitly set out the rules and obligations for any visitor who decides to use the services you offer. Whether it’s an online marketplace or online store, it is critical that your terms and conditions appropriately protect you and your business.

Am I a Marketplace?

As the name implies, a marketplace is a website or application that brings other parties together to effect a commercial transaction – eBay and Amazon are the classic examples.

It is fundamental that you draw your users’ attention to your marketplace terms and conditions. Usually, the terms are made available online, and a user cannot proceed with the purchase until they check a pop-up box that says “I Accept” or words similar. If you do not draw sufficient attention to your terms and conditions, you may find it difficult to rely on them in the event of a complaint or problem with a user.

The key to a marketplace terms and conditions is to outline that you are only responsible for bringing together the buyer and the seller clearly. As the marketplace operator, you only process the relevant transaction. Delivery of the goods is the buyer or seller’s responsibility, depending on what they have both agreed.

Marketplace Payments

Another important function of your marketplace terms and conditions is to set out how money flows between Party A and Party B. In most instances, it is appropriate to limit your liability by using the services of a payment service provider. PayPal is probably the most common payment service provider, but Stripe and PromisePay are becoming increasingly popular.

However, there might be a sensible business reason for not using a payment service provider. If so, you might take on the role of a “payment collection agent”. Your terms and conditions will then need to specify that Party B appoints you as its payment collection agent along with the scope of that appointment. Naturally, you will need to ensure that you only ever act within the scope of your appointment. Otherwise, you may find yourself liable for any losses incurred by either Party A or Party B.

Am I an Online Store?

If you advertise goods for sale yourself rather than provide a platform for third parties to promote their goods or services, you are most likely an online store. It is again important that you draw sufficient attention to the terms.

As a general rule, your sales terms and conditions should include clauses that outline:

  • How you collect payment and deliver the goods;
  • How a customer may cancel or terminate an order;
  • The scope of your returns and refund policy; and
  • The limit of your liability. 

With any contractual document, you need to think about how you expect your potential customers will interact with you during the supply chain.

Key Takeaways

The Terms of Use, Privacy Policy and Terms and Conditions are important documents. Even if you think no user will ever read them, the fact is, the documents are there to protect you.

It is important to ensure then that each document meets the requirements specific to your particular online business. The last thing you need when starting a business is any damage to your business’ reputation.

Questions? Get in touch on 1300 544 755.


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