E-business, e-commerce and websites are modern magic, including for the bottom line of many businesses.

As you spin your online magic (see photo), ensure your online presence is grounded in law.

The sage advice of the Australian eBusiness Guide (CCH, 2nd Ed.) is: “the pace of change is now so great that all businesses must constantly monitor their activities and their business models, and those of their competitors, to ensure that they do not get left behind”. The same applies to law for e-commerce and e-business. To avoid getting left behind move forward with confidence based on solid legal foundations.

Shopping list for e-commerce legal requirements

As a general guide, here’s a short e-commerce legal shopping list to use before your e-commerce website goes live.

  1. Terms and Conditions of Use: Your site should contain basic protection in the form of general conditions of use. These should be customised to your business, especially as regards your online operations. What’s the use of generic terms when you might have specific facilities or website funtions which are not dealt with in the terms? They may, for example, relate to such vital subjects as user registration, online shopping, damaged goods refunds, and product returns policy.
  2. Data Storage & Protection Requirements: There are various laws that relate to the storage and protection of data on computers. For example the Electronic Transactions Act 1999 (as enacted in most Australian states) contains provisions relating to the requirement for signatures, production of documents, keeping of electronic records and more. Breaching these laws can be a criminal offence in some instances so it is critical you know your responsibilities.
  3. Contract law: Provisions of the Electronic Transactions Act, general contractual law principles and other internet-specific legal issues all affect your e-commerce transactions. Your process and terms of trade should properly bind customers based on these principles.
  4. Privacy: Although there is no general “right to privacy” in Australia, the Privacy Act 1998 (Cth) does impose various obligations on those collecting, using or dealing with someone’s personal information through its National Privacy Principles (NPPs).
  5. Trade Practices: Ensure your advertising copy and other statements on your site do not breach any provisions of the Trade Practices Act 1974 (Cth) or other law for specific types of products or services, eg pharmaceuticals and financial services. Avoid misleading or deceiving your customers and other types of unfair or unlawful practices.
  6. IP Infringement: Be aware of the intellectual property rights of others. Are you infringing someone’s copyright or trade mark rights? Have you got permission in writing to use the logos, photos, videos, graphics or other copyright materials on your site? To illustrate, if a magazine company contracts a graphic designer to do a logo or masthead, the company should ensure intellectual property rights are assigned for all off-line and online use of the designer’s work.
  7. IP Protection: Make sure you protect your own intellectual property through intelligent use of copyright and trade mark law protection mechanisms. Inconsistent use of IP notices is everywhere. It can sink a legal claim. Checked your copyright notice in the footer of your website lately? How often they refer to a year long past! Not updating it tells your legal enemies something about how careless you are with your IP.
  8. Guides, Training and Monitoring: Adherence to these tips requires ongoing vigilance; not a one-off act of implement and forget. Ensure that all new and existing personnel running your e-commerce facility are trained about your organisation’s legal obligations. It helps to ground this in a proper Practice and Procedure Guide. Also, monitor and keep records regarding compliance.

For legals, every business is different. Generic legal documents don’t cut it when a real legal crisis arises. We know that as Sydney IP lawyers who regularly advise start-up and established software, web and online ventures. Our clients are active in a wide variety of areas including social media, P2P software, modem software, comparison shopping sites, and software as a service businesses. Whether they are business owners, joint venturers or independent contractors all at some time come to recognise the great value of having dedicated legal advice and documents. In the longer term the alternatives very often end up costing a lot more, financially and emotionally. Honestly.

Noric Dilanchian