Starting and running an online business can be both an exciting and overwhelming time for any business owner. By ensuring that your online business is legally protected from the beginning, you can avoid expensive and time-consuming legal issues arising later on. All online businesses operate with websites that require a number of key legal documents such as a privacy policy, terms of use, and terms and conditions. This article sets out a checklist of five important legal issues to consider before you go live with your website.

1. Privacy Policy

A Privacy Policy is a legal document published on a website that sets out the way in which your online business gathers, manages, stores, discloses and uses personal information. It not only serves as a legal document to mitigate risk but also builds trust with your website visitors and acts as a sign of legitimacy for your business. A Privacy Policy should comply with Australian Privacy Law (including the Privacy Act 1988 (Cth)) and the Australian Privacy Principles (APPs).

2. Website Terms of Use

Website Terms of Use communicate to anyone using your website the rules and regulations in interacting with your website. They apply to everyone using your website whether or not they intend on becoming a customer by following through with a purchase.

A Terms of Use may include information:

  • The protection of intellectual property;
  • Things that are prohibited when using the website;
  • Disclaimers; and
  • Limitations on your liability.

3. Sale Terms and Conditions or Client Agreement

If your online business sells products, you must have terms and conditions surrounding the sale. Unlike the website terms of use, sale terms and conditions are only applicable to customers that buy products from your business. Such terms and conditions govern the operation of sales and allow consumers to review the process of your business before they commit to making a purchase. Furthermore, having sale terms and conditions presents your business as trustworthy and legitimate.

Sale terms and conditions should include information on:

  • The products you sell and how you sell them
  • Payment procedures
  • Availability of products
  • Delivery of products
  • Cancellation policies
  • Consumer guarantees
  • Return, refund and exchange policies
  • Disclaimers and indemnity
  • Limitation on liability
  • Any other laws that apply to sales and your online business
  • The jurisdiction of transactions

If your online business provides a service, you must have a client agreement depicting the relationship between your business and a client, tailored specifically to the services you provide. A client agreement should include information on:

  • The description of services your online business provides
  • Payment and associated terms
  • Expectations of your client
  • Transferring intellectual property
  • Termination of agreement
  • Limitation on liability
  • Dispute resolution

4. Intellectual Property

Intellectual Property is a valuable asset to your business as it provides you with legal rights and may also serve as a marketing tool. Intellectual Property can include the name of your business, trade marks, copyright and more. Copyright laws in Australia automatically protect any ideas that your online business expresses – it is not necessary to register copyright. Registering a trade mark affords you with legal rights permitting your exclusive use of the trade mark, the right to licence or sell the trade mark and ensures no one else can legally benefit or use your trade mark.

The protection of your online business’ intellectual property is your responsibility. To ensure the intellectual property of your online business is protection it is up to you to monitor infringements and then enforce your rights. You can conduct simple Google searches, search the Australian Securities Investment Commission (ASIC) register and Australian Trade Mark Online Search System (ATMOSS) to monitor infringements. If you wish to enforce your rights upon finding an infringement you can do so through directly contacting whoever infringed your rights or taking legal action.

5. Applicable Laws

Laws governing the international nature of the online space and associated transactions prove to be an issue. As your online business may be accessible all around the world, it is important to be aware of overseas laws that may apply to your business. Having a well-drafted set of terms and conditions may assist in avoiding conflicts that may arise internationally.

Key Takeaways for Online Businesses

There are many legal considerations to be aware of when starting and running an online business. To ensure the success and development of your online business, it is important to have a Privacy Policy, a Website Terms of Use and Sale Terms and Conditions or Client Agreement dependent on whether your business sells goods or provides a service. In addition, being aware of procedures to protect the intellectual property of your online business and overseas laws that may apply are also important. Get in touch with one of our business lawyers if you have any questions surrounding the legal issues to be aware of surrounding starting and running an online business.

Anthony Lieu

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