The rapid rise of online sales doesn’t appear to be slowing anytime soon.
The National Australia Bank recently estimated that last financial year Australians spent $17.3 billion online. With this growth, businesses are increasingly shifting their focus from bricks and mortar to the provision of goods and services online.
But business owners should be mindful that the provision of goods and services online, compared to an over the counter transaction, gives rise to a whole new set of legal considerations.
Here are four key legal considerations for any e-commerce business.
1. Terms and Conditions of Sale
An on-line sale is not unlike any other sale in that it is a form of contract between retailer and consumer that may be subject to terms and conditions. Unlike most over the counter sales, an online sale affords the retailer an easy and clear opportunity to present their terms and conditions to the customer and have the consumer accept them – usually via ticking an ‘I Agree’ box.
Some key items to include in the terms and conditions of sale are in relation to payment, postage and delivery, returns, security, warranties and liability.
Well-crafted terms and conditions of sale can provide protection for the retailer and certainty for the customer.
2. Website Terms of Use
In addition to the terms and conditions of sale it is important that a website also includes terms and conditions. In contrast to the sales terms which govern the transaction, the website terms of use will govern the use of the website.
A website owner cannot control who uses their website or how the information on the website will be interpreted or used. Therefore, website terms and conditions are important to protecting the owner from liability.
The content of the website terms and conditions will vary depending upon the type of site and business, but generally they should include: The protection of intellectual property rights, the permissible use of the website and a limitation of warranties and liabilities.
3. Privacy Policy
If a business has a website from which goods or services are sold it will require a website Privacy Policy that complies with the Privacy Act 1988 (Cth). This Act regulates the handling of personal information about individuals and the obligation to advise how the business shall collect, use, store, access and disclose their personal information.
Of course it is not sufficient for a business to have a compliant Privacy Policy on their website it is must also follow the policy and employ robust procedures to ensure compliance.
4. Protection of Intellectual Property
Before an e-commerce business goes live with its website consideration should be given to protecting the intellectual property of the business. The registration of a business or company name with ASIC does not afford an owner extensive legal protection.
The best way to ensure that you have exclusive ownership and legal rights over a brand is to register it as a trade mark. It is a relatively simple and inexpensive process compared to the degree of protection that it affords.
While the internet presents boundless opportunities for business it also presents unique challenges. Therefore, before taking the plunge into an e-commerce business venture owners should ensure that they have in place the best possible legal framework.
