Fundamentals of Setting up an Online Business – do your homework and get it right from the start

When you’re setting up an online business, it’s important to consider the legal aspects that should be included in it.

Generally speaking, websites contain disclaimers, privacy policy and terms and conditions of use depending on their nature of use. It is essential to have these legal policies to safeguard your online business from potential disputes that may arise. Most importantly, these policies must be relevant to your business, and drafted carefully so they are legally compliant. Therefore you should always seek legal advice when wording these terms for your own use.

You should consider the following three fundamental features when setting up an online business:

Website Privacy Policy

A Privacy Policy sets out how your website collects, stores, uses and manages any sort of personal information of users such as their email address, physical shipping address and payment details. It is also an obligation under the Privacy Act 1988 (Cth) for all Australian websites to display a privacy policy if collecting user information online. It is particularly important if you are using any third party advertising or analytics features on your website. As they will collect data about your website usage and offer third party links, you must notify the users of this in the privacy policy.

To be legally compliant the privacy policy must be featured, and accessible throughout the navigation of your website, for example; the link to privacy policy may be featured at the bottom or top of the page as a default display.
Website Disclaimer

The right disclaimer for your online business will depend on the type of business and the goods and services you are providing. If you are selling products for instance, you will need a Disclaimer to limit your liability for any loss or damage, (subject to any statutory protection to consumers), that the buyers may face as a consequence of use or misuse of your products. A Disclaimer cannot prevent users from raising claims, but you can at least set the boundaries of your liabilities and protect your business. Generally the types of liabilities that can be covered by a Disclaimer include content accuracy, copyright infringement and links to third party websites and virus transmissions. The Disclaimer must be prominently displayed on your website in order to notify the users of its existence.

Website Terms and Conditions of Use

Often the “Disclaimer”, and “Terms and Conditions”, are considered as interchangeable. A Disclaimer however, is generally less detailed than Terms and Conditions. Terms and Conditions are more widely used for commercial websites, for example, regarding their supply of goods, services or subscription for payment. If your website is of a commercial nature, then you must have Terms and Conditions of use as required under the Australian Consumer Law.

The Terms and Conditions should generally explain the rights and responsibilities of the user (consumer), rights and responsibilities of the business, the way it complies with any legal requirements and its limits on liabilities. The terms of payment, services, return, refund and delivery must be made clear in your Terms and Conditions as required by the Australian Consumer Law.

The Terms and Conditions will also extend to limiting your liability for any information and material displayed on your website. It should also include statements to protect your intellectual property including original videos and articles that you create.

These legal policies are subject to the existing consumer protection laws, nevertheless, having them right will prevent abuse from users, help enforce your rights over the intellectual property, limit your liability and set the governing law for any potential disputes.

Having an Online Business can be both satisfying and rewarding, but always make sure you build your business on sound foundations right from the start.

Stella Park

Solicitor

Koffels Solicitors & Barrristers, Sydney