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14 June 2010

Risky Business: Running An Online Business Without Terms Of Use

No one really notices them while shopping online. However, mega sites such as Amazon.com and Toys “R” Us have them, so do smaller names such as SnuggleMe.com, an online pet products retailer. These are the all-important website terms and conditions, which should be on your website too.

Website provisions are not just legalese that attorneys insist on inserting onto your website.
When you set up an internet store, you are offering your customer products, services or deals. The rules that govern cyberspace shopping are the same as those for physical business transactions.
You want to ensure that (i) you are getting what you are paying for (ii) at the price you agreed to, and (iii) you have options if you are not happy with what you received. The basic principles of commerce hold true whether you are selling bookkeeping services to Greenway Law Firm in New Jersey, or jewelry to Alice in Arlington. It is necessary that your customers are clear in their minds.

Internet shopping also raises a number of legal issues that you don’t necessarily see to the same degree in the “bricks and mortar” world. Because Internet law is so new, it is unclear as to how it will be interpreted. Leaving matters open to chance could be a risky proposition indeed.

What can you expect to see? Terms and conditions don’t always go by the generic name “terms and conditions.” Sometimes, terms are divided into subject areas on separate web pages, like “privacy” or “returns” or “disclaimers.”

The breadth of terms you may need depends on the nature of your business. If your website is a brochure-type site that simply promotes your own services, you may not need as robust a list as a site like Home Shopping Network (hsn.com), which sells other people’s products.

Consider the following categories:
1. Privacy Policy/Privacy Notices. These largely cover how you will collect and use information. Will you rent, share, or sell the personal information you capture? Will you place cookies on your users’ sites? Given the concerns about identify theft and security, you’ll want to put your customers’ minds at ease with reassurances about confidentiality and how you’ll maintain the security of the information you collect.

2. Legal/Terms of Service. These cover a lot of the legal ground rules about acceptable behavior on the site. If your site has any kind of community forum, you’ll want to be sure that everyone “plays nicely in the sandbox”: no offensive language, no harassing, no infringement of other’s intellectual property, etc.

Terms of Service provide the meat of the contractual terms so that your customers can’t come back and say, “I didn’t know... I didn’t agree to this...” or find some other way to weasel out of the purchase they made. And, because lawyers like disclaimers, they also state that you have no responsibility for what people may find when they link through your site to 3rd party sites.

3. Payment and Returns. These terms focus on your financial arrangement. What will you charge? Under what circumstances will you change your pricing? Do you have a return policy?

What forms of payment will you accept? Credit cards? PayPal? Personal check? Cash? Each one of these has its costs and inconveniences so choose what makes sense for you.

4. Copyright and Intellectual Property Policies. Your site contains valuable intellectual property (yours, certainly, and possibly other people’s). These terms cover the procedure for handling intellectual property infringement claims, and what actions are permissible (or prohibited) on the site.

Wow -- what a list!! Now you see why website terms and conditions are an important part of your arsenal of protection - and why it’s not wise to put these together yourself. These provisions can vary depending on the nature of the product or service being offered, so make sure to review your terms with an attorney so that they are relevant for your business and provide you with the protection you’ll need!
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Nina Kaufman, Esq. demystifies legal mumbo-jumbo to save small businesses time, money, and aggravation. She’s an award-winning business attorney and columnist/blogger for Entrepreneur Magazine online.

Learn more about her user-friendly business law resources at http://www.GreatBusinessLawResources.com. For her free Contracts & Collections Info Kit, go to http://bit.ly/freecontractlaw

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