Tuesday, April 28, 2015

Legal tips for selling online

These tips are designed to protect online vendors from unnecessary liability.

  1. Monitor sales to identify your key market jurisdictions that you are unfamiliar with.
  2. Research the law of your key market jurisdictions. Is there a “cooling off” period that allows consumers to demand a refund even after a couple of days the sale had been made? Are there laws that do not allow you to disclaim or cap warranties? Will you have to litigate in the customer’s home country? Adjust your agreements for those jurisdictions accordingly.
  3. Do not sell as a sole proprietor because it exposes you to personal liability. Forming a company is essentially an insurance policy against being liable with all your personal assets in case something goes wrong.
  4. Restrict access to downloads or other orders until the customer has clicked the Accept button to indicate the acceptance of the Terms of Use, EULA or other applicable agreement(s).
  5. Permit the customer to review the whole order before the final confirmation of acceptance.
  6. Consider avoiding the comment field next to the Accept button where customers can leave a message at the same time they make a purchase. If a customer inserts smth like, “I do not accept your disclaimer of warranty clause” and your  system still confirms their order, you may be contractually liable to honor their “no disclaimer of warranty” comment.
  7. Your website must have Terms of Use as a basic protection.
  8. Privacy Policy. In some jurisdictions (such as the EU) the privacy protection law is strict. In other jurisdictions (e.g. the US) the privacy protection law is quite lax. However, even where the law is lax, you should still have at least a basic boilerplate Privacy Policy in place. This helps your business gain some credibility as well.
  9. CAPITAL LETTERS for disclaimers of warranty, non-standard terms and terms that significantly limit the consumer’s rights. Legislators of many jurisdictions are well aware that very few people actually read whole EULAs or other online agreements before clicking the “I Accept” button. So, in many countries there are laws designed to protect consumers from being taken advantage of by vendors that may try to sneak in unfair terms into a morass of legalese that nobody reads. Such consumer protection laws require online vendors to bring special attention to unusual, surprising, non-boilerplate terms of the agreement. Capital letters are a good way to comply with such laws.
  10. Use simple English.
  11. If you sell over the telephone, ensure the customer service representative verifies that the customer has read the Terms.