Any venture into the world of ecommerce, be it an online store, app, marketing endeavor, or indeed any scenario when you’re selling your goods or services to online customers, has unavoidable legal consequences.
As a savvy entrepreneur, you’ve probably anticipated the need to make your website not only user-friendly, but also compliant with legal requirements.
The different legal documents, however, may prove confusing even for the most business-minded among online business agents. Further, their applicability and effects vary from jurisdiction to jurisdiction, making the matter even more complicated, since online commerce is generally a global endeavor.
Here’s a breakdown of the three most common legal documents and statements you should have on your website or mobile app and how they differ from one another.
Table of Contents
- Terms and Conditions
Digital analytics software collects information from users browsing your site before they have even ordered a product or service.
In order to stay compliant, the Federal Trade Commission advises website owners to review and adhere to their own privacy policies, or they could face legal action. State law may also require that online entities have privacy policies in place.
GDPR requirements also impose strict penalties on companies that do not protect the privacy of EU citizens accessing websites, regardless of where those websites are located.
2. Terms and Conditions
In the case of an online store, the terms and conditions determines what will happen in the event of a sale. Essentially, it enables you to structure your return policy, shipping deadlines, and any other details that are essential to the transaction.
While your online store may display a product with a price attached, the terms and conditions offer the “fine print” as to what actually occurs when a user surfing your website decides to purchase and wants to enter their credit card information.
Your legal policies should be tailored specifically to your website, so it’s crucial that you avoid the temptation to copy another website’s policies.
The FTC does not require you to have a terms and conditions document on your website; in fact, it’s entirely possible, from a legal standpoint, to do business without one. However, doing so is akin to making a handshake deal in real life versus having a written contract. With a handshake deal, you’re taking the other party at their word that they will uphold their obligations.
Additionally, most app stores require that an app terms and conditions be posted within your app or on and accompanying site in order for it to be made available to the public.
Using a free terms and conditions generator allows you to set the rules of your site or app, be it establishing guidelines for proper user behavior on your discussion forum or signing up for a free trial of your online app.
Although many people are said to ignore disclaimers because they appear so frequently, they are an important part of business correspondence. They are also a common sight on websites to remind users of the limitations of the service provided.
An excellent disclaimer example is found on most law firm websites, stating that the information is of a general nature only and not to be used as legal advice. The intent of that kind of a disclaimer is to prevent someone from suing a law firm after suffering harm from following general advice they received from the site.
Legal disclaimers vary depending on the nature of the product or service sold. Most licensed professionals, including lawyers and doctors, must adhere to specific rules about advertising their services. Otherwise, they could be faced with losing their licensure or sanctions from the licensing body.
Non-licensed entrepreneurs who sell a particular type of product, such as health supplements, must adhere to specific FDA guidelines that prohibit sellers from making unsupported health claims. Whenever you sell a product online, it’s essential to review the legal body that governs your industry so you can generate a disclaimer unique to your site that limits your liability.
Creating a disclaimer for your website will limit or prevent legal liabilities and claims in the event a user misinterprets your site content. Use our disclaimer template to get started.
In order to decide what kind of information to use in a disclaimer, it’s a good idea to do a self-assessment of how your website will be, or could be, used. Upon consultation with a lawyer, you may want to include any potential risks to users in a disclaimer.
For example, if you are a third-party reseller of consumer goods, you may want to affirm that you do not take responsibility for the condition of the goods once shipped by the third party. In essence, a disclaimer is intended to limit liability, but you should speak with a lawyer if you have significant concerns about the ultimate well-being of those who use your website.
Before you launch your website, you should use these documents to both comply with the law and protect yourself from liability. Taking these proactive steps, even when it’s not explicitly required, can help ensure you’re on firm ground in the event of a legal dispute and that you are offering a positive image of professionalism to your users.
When you are launching a startup, you need to take a lot of steps to make sure that you successfully get your business off the ground and set it on a path that will bring you profit and help you meet the needs of your future customers.
These legal agreements are incredibly valuable for both you and your customers, because not only do they inform people about everything that they are agreeing to when they start using your services, but they also protect your company against legal claims.
Since they have different purposes, you need to make sure that you fully understand what each of them is and why you really need them, so read on.
It should be provided to them through your website or the app before they actually start using them.
What exactly is meant by “personal information”? Personal information includes your users' names, addresses, email addresses, IP addresses, date of birth and credit card information and anything by which your users can be identified.
For instance, you may collect their email addresses, so that you can send updates about your products or services.
That kind of information includes their zip codes, the pages that they visit on your website, the web browsers, and devices they are using to visit your site and anything that cannot be used to identify your users.
You need to show your users that they can trust you and that you will handle all of the collected and stored information with the utmost care.
Therefore, the main purpose of this legal document is protecting your company against any kind of legal liability. Even if you don't collect any kind of information, your users need to know that, because you certainly want them to feel safe when using any of your services.
It will help you build trust with them and inspire their loyalty.
This means that you need to inform them about the update in advance so that they can decide whether or not they want to continue using your services.
What is a terms and conditions agreement?
Therefore, in order for people to use your website or mobile app, you need to clearly state what they need to do if they want to use them, as well as what you will do in case of some violations of the rules that you lay out in the agreement.
Your terms and conditions agreement should include your copyright details, your billing, and subscription policies (especially important for SaaS companies), potential warranties on your services, potential modifications of your services, and how exactly your users may use your website or mobile app.
This agreement should also include what will happen if a user doesn't abide by your rules and guidelines and if they abuse your website or mobile app. For instance, they may be requested to pay a fine, or they may be temporarily or permanently banned from using your services.
You should also make sure that your terms and conditions agreement includes a disclaimer notice that will limit your company's liability. This means stating that you will not be held responsible if someone finds some kind of information on your website or mobile app to be incorrect.
Although this agreement is not required by law, it is highly recommended that you have it, precisely because of limiting your liability, as well as for protecting your company against any potential abuses of your website or mobile app, such as copyright infringement, for instance.
It is very important to protect your intellectual property, such as your logo, your unique web or mobile app design and your content (unless the content is user-generated), which is yet another reason for having a terms and conditions agreement.
Therefore, you should make sure that you include the Intellectual Property clause in your terms and conditions. Also, you should include the Governing Law clause to show that your terms and conditions are governed by the law of the country that you operate in.
Apart from limiting liability and protecting your business against any kind of abuse, this legal document also enables you to build credibility and trust with your users.
You inform them of their rights and responsibilities towards your company, as well as yours towards them, which shows that you are a professional who is trustworthy.
If you plan on changing anything in your agreement, you need to inform them about the changes in advance and clearly state when they are going to take place.
Single agreement or separate agreements?
Keeping your legal agreements separate also lets your users know that each of the documents has a completely different purpose. It also helps them comprehend and retain all of the information easier.
But you need to make sure that the agreements are clear, concise and written in plain language that your users will be able to understand because not everyone will understand various legal and technical terms.
These agreements will help your website or mobile app users feel safe and secure when using your services, so you can easily form meaningful relationships with them and expand your customer base.
Moreover, you will effectively protect your business against any potential legal claims by your website visitors or mobile app users and make sure that it stays on the right road to success.
Therefore, make sure that you properly and carefully draft these legal documents and that you make them clearly available and easily accessible by your users.