A marketplace is an online platform that connects people who have products or services to sell, hire or lease. Traditionally speaking, marketplaces aren’t created to sell your own products or services so its terms and conditions will generally address how sellers and purchasers use the platform. However, nothing stops a marketplace from also selling. This article will explain if you need two terms and conditions if you’re a marketplace selling your own goods or services.

How Does a Marketplace Work?

When a purchaser is matched with a seller, the marketplace has performed its job. It will then excuse itself from the transaction. For example, eBay is a marketplace that allows individuals or businesses to sell products. Except for providing a dispute resolution process, eBay’s terms and conditions are limited to how sellers and purchasers can use the platform. Other key considerations are left for the seller to determine, such as:

  • payment method;
  • delivery method; and
  • refund and exchange policies.

What if I’m Selling My Own Products or Services?

If you’re creating a marketplace that sells its own products or services, you won’t necessarily need two different terms and conditions. What‘s important is that you have a comprehensive set of terms and conditions that address the rules for customers buying products or services directly from you as a marketplace, rather than from sellers on your marketplace.

Online directories are like an online version of the Yellow Pages. They are platforms where businesses can advertise their services. Traditional online directories might categorise a service or attach filters, but they don’t generally do much more than that. However, online directories sell a service of its own when they actively promote certain businesses in exchange for a fee. In such cases, the platform is also selling marketing services.

There are a number of key terms you’ll want to include in your terms and conditions to address you selling services as a marketplace.

Description of Work

Your terms and conditions need to describe the services you’ll be providing to the businesses on your platform. For a marketing business, it’s essential that this clause is as clear and detailed as possible. When the clause is broad and hard to understand, disputes often arise.

For example, a business could expect you to provide a service that you don’t provide, but this isn’t set out in your terms and conditions. Alternatively, you could be writing content to accompany the listing, or promoting them on the homepage or even on your social media accounts. It’s essential that you include or exclude all of these options in your terms and conditions.

You may also want to include service levels. For example, how often will you be promoting them on your homepage? While you may negotiate deliverables with a business, you want to exclude any guarantees that the business will increase its customer base or revenue as a result of your service. If you include such guarantees, you will bear significant legal risk.

Payment Terms

You may want businesses to pay upfront or on a subscription basis. This is up to you. However, you should specify these payment terms in your terms and conditions, including the specific amounts and due dates. You may also reserve the right to suspend the business’ services in the event of non-payment, and terminate the service for continual non-payment.

Intellectual Property

You may request photos or other digital content to use to advertise and promote the business on your platform. This is usually the business’ intellectual property (IP).

However, if you’re creating new content to accompany their listing, your terms and conditions should address who owns that IP. This will protect your platform from any future disputes and will also deter the business from cancelling your service in order to repost the content on their own website for free.

Termination

You should also specify the circumstances in which either party can terminate the agreement. This includes any notice periods or fees applicable when the business chooses to terminate your services before the end date you agreed upon.

Key Takeaways

Traditional marketplaces don’t sell their own products or services. Accordingly, standard marketplace terms and conditions will only address how sellers and purchasers can use the platform.

If a marketplace selling your own goods or services, it’s essential you have a comprehensive set of terms and conditions. These must set out the rules for when businesses purchase your own products and services. If you need assistance ensuring your terms and conditions contain all the necessary clauses, get in touch with LegalVision’s online lawyers on 1300 544 755 or fill out the form on this page.

Justin Ocsan
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