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When launching an online marketplace which connects customers with suppliers, you will likely be focussing on building out your business model and deciding payment options. However, it is also important to think about the legal documents that you need to run your business. Not having the right documents in place could have consequences in the long run if you get into any legal disputes. This article will explain three key documents that your online marketplace needs:

  1. marketplace terms and conditions;
  2. website terms of use; and 
  3. privacy policy.

1. Online Marketplace Terms and Conditions 

Your marketplace terms and conditions document is the contract between your business and the people who use your website to arrange transactions. This document will be crucial for your business, as it will outline the sale and purchase process between users. 

When you operate an online marketplace, you enter into legal relationships with multiple parties. 

For example, online marketplace Airbnb enters into legal relationships with:

  • the homeowners;
  • property managers; and
  • people who are looking to stay in the properties. 

As a marketplace operator, you have options on how you can work with other parties. You may just wish to provide an introductory service and leave the parties to sort out the payment on their own. Alternatively, your marketplace may offer everything the parties need for the transaction to occur.

Clearly outlining this role is crucial as you can then also outline your legal responsibility if something goes wrong between the parties. If you don’t clearly specify this, you might have to pay for damage that was caused by another party.

Specific key terms need to be covered in your marketplace terms and conditions, including:

  • account registration; 
  • how customers interact with suppliers;
  • payment processes; 
  • return, refund and exchange policies;
  • delivery;
  • cancellation;
  • consumer guarantees;
  • dispute resolution;
  • disclaimers;
  • indemnities; and 
  • the limitations of your legal responsibility.

2. Website Terms Of Use

Website terms of use are a document that is often forgotten within the e-commerce industry. However, this document is crucial as it will outline how visitors can use and interact with your website. 

Not everyone who visits your website will sign up to use your marketplace, or become a paying customer. Nevertheless, you will need a terms of use document to protect critical aspects of your business.

Some of the key clauses included in terms of use are:

  • disclaimers;
  • use of the website;
  • intellectual property protection; and
  • limitations of your legal responsibility. 

Therefore, if anyone who visits your website breaches any of these terms, you will be legally safeguarded and can take action against them to protect your business.

3. Online Marketplace Privacy Policy

A privacy policy is a document that should set out the way your marketplace collects and uses personal information. Users should be able to access your privacy policy from your website easily.

You will need a privacy policy if you are an APP (Australian privacy principles) entity. APP entities include (but are not limited to) entities which:

  • have an annual turnover of $3 million or more; 
  • provide a health service; 
  • hold health information other than employee records; or  
  • trade in personal information. 

If you are an APP entity and you do not have a privacy policy, you can face hefty fines for breaching privacy laws.

However, even if your marketplace is not an APP entity, having a privacy policy is still the best practice. When customers and suppliers interact with each other on your marketplace, they will likely be submitting personal information to you. When dealing with personal information passed between users, you can show that you take their privacy seriously by having a privacy policy in place. 

Your privacy policy should outline: 

  • what information you collect;
  • how you collect it; and 
  • what you do with it. 

You should also make it clear to customers that they can view or correct any data you hold about them. 

Key Takeaways

Having your terms and conditions, terms of use and privacy policy in place will be crucial for your marketplace business. They offer transparency with your customers and can help minimise disputes down the track. This is because they can protect your business by limiting your legal responsibility if issues arise. If you have any questions about which documents your online marketplace needs, contact LegalVision’s e-commerce lawyers on 1300 544 755 or fill out the form on this page. 


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