A quick legal checklist before starting an online business

You have a great idea for a product or service, you have your website up and running, and you’re getting ready to go to market online. It’s an exciting time and the last thing you want to think about is your company’s and your website’s legal compliance. But it’s an important step to take to ensure that disputes over the use of your website and the purchasing of your products/services don’t arise, or if they do, that you have the right protections and agreements in place to protect both you and the consumer.

There are many legal considerations when it comes to creating an online business and below the team at Cubed by Law Squared have pinpointed some of the most important to ensure that you begin your startup journey on the right foot.

 

USE OF YOUR WEBSITE BY CUSTOMERS

You might have a very clear idea of what your website and products or services will be used for but this is not always obvious to the people who visit your website. A well-drafted Website Terms of Use (WTOU) is integral as it allows you to articulate the purposes and the permitted uses of the website. It also gives you the ability to indemnify yourself in the instance that someone uses your website for an unauthorised purpose.

 

ENGAGEMENT WITH YOUR CUSTOMERS

Terms and conditions are also a useful document to put in place for your website particularly to govern any monetary or service exchanges. Website Terms and Conditions create IP rights, and impose rights and responsibilities on both the user and the owner of the domain. A Terms and Conditions document ought to contain details about how a commercial transaction unfolds. How do your customers pay for and receive your goods and services? How much do they have to pay for them? Having these details set out in black and white helps to prevent unnecessary disputes arising and allows for speedy dispute resolution.

 

PRIVACY OF YOUR USER’S INFORMATION

If throughout the course of your business you are collecting, using or storing your customer’s information you need to have a privacy policy in place to govern these processes. Privacy Policies should be bespoke and tailored to your business, the way you handle and collect data and the purpose for which you collect that data. Your privacy policy needs to be compliant with Australian Privacy Laws and also may need to contemplate the General Data Protection Regulations (GDPR) applying to all European Union citizens. It is critical to understand that if your business collects sensitive information (as defined by the relevant laws), then your data handling and collection needs detail attention.

 

INTELLECTUAL PROPERTY

On a website intellectual property (IP) can encompass anything from the name of the company and its logo to the source code in the background. Protection of your IP is important to a company as it preserves your rights to those elements now and into the future and stops others from using them unnecessarily unless permission is given through an IP Assignment or Licence Agreement.

Protection of IP often is a process of trademarking your designs, logo and name (among other elements of your website). If you are looking to commercialise or protect your IP for the benefit of your business, you can contact the team at Cubed by Law Squared for more information.

 

RETURNS AND DEFECTS FOR ONLINE PRODUCT SALES

Return policies and product defects often arise in the area of consumer law when online businesses selling goods end up in trouble with consumers and in serious situations, with the ACCC. It is often tempting, or seems logical, to exclude returns or exchanges on items or goods purchased more than three months ago; however, ensuring you are compliant with consumer laws is important. Some key areas where businesses get it wrong on returns:

  1. ‘We do not provide refunds’ – this is a breach of the Australian Consumer Law and should not be written anywhere on your website;
  2. ‘No refunds on sale items’ – same as above
  3. ‘Major faults vs. minor faults’ –
    • If MAJOR – the consumer can elect to have a replacement or a refund for the goods or services
    • If MINOR – the consumer has a right for the fault to be repaired without a refund

 

— Grace Cue, Legal Project Officer, Law Squared

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