Creating an Airtight E-Commerce Website
Consumers are spending an increasing amount of time online. Information compiled from 2018 shows that the average adult user spends 6.3 hours per day with digital media. This includes mobile, desktop/laptop, and other streaming devices and gaming consoles. This trend is reflected by the fact that consumers are spending an increasing amount of money shopping online. According to information and data measurement firm Nielsen, e-commerce is likely to be worth more than $4 trillion by 2020. The big names like Amazon and Alibaba have reaped major benefits from the growth e-commerce is experiencing, but this growth is not just for them. Small to mid-size businesses have the exciting opportunity to leverage e-commerce as a way of getting in front of consumers and growing their business.
As your e-commerce sales continue to grow, it is important to ensure that your business retains an attorney and that your e-commerce website has the legal documents necessary to address potential pitfalls and proactively resolve disputes. There are significant legal issues that come with operating a business online, and this blog highlights some of the issues businesses operating e-commerce websites face.
What Legal Documents Do I Need For My E-Commerce Website?
Privacy Policy: A privacy policy is a document that notifies users about a website’s established practices with respect to its collection, use, disclosure, sharing, and storage of personal information. A privacy policy is legally required for all websites that collect personal information. See our blog post on privacy policies and why your website needs one here.
Terms of Service: Also referred to as Terms and Conditions or Terms of Use, a Terms of Service is a legally binding agreement that sets forth the website operator’s rules with respect to how their website may or may not be used.
Terms of Sale: A Terms of Sale is a document used by e-commerce websites to communicate the binding terms applicable to the sale of goods to a user. This document will generally cover the following information:
Price and payment (including sales tax, if applicable)
Customer service
Order confirmation, changes, cancellations, and returns
Order processing and shipping
Privacy and data security
Shipping & Delivery Policy: This document describes a website operator’s policies with respect to shipping and delivery of goods to its customers.
Return and Refund Policy: This document describes a website operator’s policies with respect to returns and refunds, and an e-commerce business must always be sure to communicate such information to users.
Community Guidelines: These guidelines may be included within a website operator’s Terms of Service, but they are designed to inform users what is, and what is not, acceptable when using the website. Community guidelines are typically used when an e-commerce website uses elements of social media.
Intellectual Property Policy: An intellectual property policy is one of the most important aspects of an e-commerce website. This policy provides notice to users about the intellectual property rights held by the website operator and describes the user’s rights with respect to such intellectual property. This policy must include Digital Millennium Copyright Act (DMCA) enforcement information and procedures, including takedown notification procedures. See our blog posts on copyrights and trademarks for more information on the value of intellectual property rights.
Legal Disclaimer: A website operator issues a legal disclaimer in order to limit its obligations and exposure to liability and damages.
Publicity Release: Anytime an e-commerce website incorporates audio/video endorsements or photos of individuals, it is necessary to obtain a publicity release. This mitigates the possibility of being sued for the unauthorized use of an individual’s likeness or image.
Material Connection Policy: Where a website operator maintains a relationship with a manufacturer or seller of products that it promotes, reviews, or sells online, it should draft a material connection policy. Federal law prohibits unfair or deceptive trade practices and a material connection policy discloses material relationships to users in order to mitigate potential liability.
An End-User License Agreement (EULA): If your e-commerce business operates a mobile app, then a EULA is essential. EULAs provide users with a license to download, install, and use the mobile app and lays out the rules applicable to usage of the app.
There are additional legal documents that may be necessary for e-commerce businesses dealing in particular industries or particular goods, but this list is an excellent platform from which to begin. Drafting and implementing these documents will go a long way in ensuring compliance with applicable law and assisting the company’s e-commerce growth. In addition, many of the documents and policies identified above may be included within your Terms of Service so that your users can find all of the relevant information in one spot.
Contact us today with any questions you have concerning e-commerce and operating a business online!
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Photo by rupixen.com on Unsplash
*The material and information in this blog is for general informational purposes only. In no way is this information to be construed as legal advice for a particular situation.*