• In addition to the responsibilities as a traditional physical retailer of goods and services, an online business faces a number of additional legal obligations, including handling online payments, customer privacy and online reviews.
  • There is a range of legal documents required to operate a website, including Terms of Use, Terms and Conditions and a Privacy Policy.
  • Online businesses in Australia are obliged to adhere to the Competition and Consumer Act 2010, particularly Schedule 2 the Australian Consumer Law (ACL).

Selling Products and Services Online

Selling products and services online provides an additional channel for revenue for a business. However, there are legal responsibilities and risks to consider. In addition to the Competition and Consumer Act, online businesses must adhere to specific online regulations, including The Australian Guidelines for Electronic Commerce.

Australian Consumer Law

The ACL applies to all Australian businesses that deal with consumers (which can include small businesses). The ACL regulates standards of business conduct, unfair contract laws, harmful business practices, regulation of specific types of business-to-consumer transactions, basic consumer rights and the regulation of consumer product safety. The ACL is part of the main federal law, the Competition and Consumer Act, which ensures that trading is fair for your business and your customers.

The goods you sell must fulfill certain conditions and warranties set out by the Competition and Consumer Act. This includes goods must be of merchantable quality, be fit for the purpose or job that they are meant to provide, match the description or sample given, be free from defects and faults and be clear of finance or encumbrances not disclosed to the consumer. If your online business offers a service, you are under the same obligations to carry out the service with due skill and care.

Online Payments

There are some different methods for online transactions. A credit card is one of the most common popular online payment methods. You may need a merchant account to accept credit card payments. Financial institutions usually charge merchant accounts fees for set up, transactions and account keeping. To receive credit card payments online, many organisations use a combination of a merchant account and a payment gateway. PayPal, Paymate and eWAY are examples of online payment service providers that act as intermediaries between merchants and consumers.

Online Security

An online shop must protect the data it collects including names and credit card details. You must inform website visitors of what measures you take to protect their personal details. This may include SSL certificates, encrypted data and safe storage.

Key Issues

  • Discuss your legal obligations and website requirements with your website design and development team.
  • Even though they may not hosted by you, your social media accounts and any third party sites where you have an official presence (such as forums) must be constantly monitored.
  • In addition to initial setup costs of online businesses, there are ongoing costs in maintaining a website, including merchant fees applied for every sale.

Legal Considerations

Website Terms

Website terms apply to each website visitor and protect your website. The Website Terms should cover issues such as the accuracy of the content, your liability for content or material presented online and the rights and obligations of using your website.

Privacy Policy

There are privacy laws that determine what you can do with the personal information of your customers, supporters or donors. The Australian Privacy Principles (APPs) apply to all online businesses. It is also worth thinking about making your privacy policy, which is a requirement of Privacy Act 1988, available on your website.

Sales Terms/Client Agreement

Your Sales Terms apply to selling products, and your Client Agreement applies to selling services. These can be combined if you sell both. These address what you are selling, how, when, protection for your intellectual property, ACL requirements, and disclaimers including what you are not liable for.

Social Media

The use of social media raises some responsibilities for online business. It is important to ensure online reviews are genuine, avoid misleading statements and prevent breaching any policies outlined in employee handbooks. Your business is considered to be the publisher of anything posted on your site or social media pages, so you have potential liability for defamation.

Intellectual Property

When you are registering the domain name or developing content for your website, it is a good idea to pay careful attention to not only your intellectual property but also the rights of others. You should consider registering any relevant trade marks that apply to your business, and mark them where necessary on your website.

Frequently Asked Questions about Selling Products and Services Online

Q: What is spam? How does it affect my online business?
A: Spam is electronic junk mail used to send bulk unsolicited promotional emails indiscriminately to a large volume of email accounts. Under the Spam Act 2003, it is illegal to send unsolicited, commercial electronic messages, except in specific limited circumstances.

Q: What are some key steps in protecting IT data?
A: Protection can include providing a secure site through a secure socket layer (SSL) certificate, backing up data, authentication and use of passwords.

Q: What IT risks face online businesses?
A: IT risks include hardware and software failure, human error, spam, viruses and malicious attacks, as well as natural disasters such as fires, cyclones or floods.

Q: Do I need to register my online business?
A: All business owners in Australia have to register an ABN before commencing any business activities.

How can LegalVision help me?

We have helped many businesses with selling goods and services online and it would be our pleasure to assist you. We provide fixed prices for your certainty and peace of mind. Call LegalVision today on 1300 544 755.

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