Here at Legal123 we think we know a bit about online legals, and we see the same thing often:
You have your idea for your online business start-up site, your website developer is working on it and then you realise you haven’t considered your website legals. Your developer asks you where they are?
Get business news first
Sign up to SmartCompany’s daily newsletter
In fact, you are not even sure what you need. You look around at other websites and see that they have privacy, terms and disclaimers on their sites. You speak again to your developer who says you should have them and they tell you to ‘just copy them from another site as no one reads them anyway’. So you do.
Why this can be a major mistake for you and your business:
1. The most important protection for you is your contract with your customer
Your terms and conditions should be an important consideration, particularly for an e-commerce website. They are your contract with your customer.
The most important issue is that you are putting yourself and your business at risk with your customers in the absence of good terms and conditions on your site. You are essentially relying on your terms to protect you and your business in the event your customer sues you or reports your business to a regulatory authority.
A court will first look to your website terms to determine your relationship with your customer and the contractual terms you have agreed. If you have copied them from another site, you will have difficulty relying on them to protect you and your business. A customer issue could end up closing down your online business or sending you bankrupt through a court process you did not expect.
2. You are breaching copyright
You are breaching copyright if you copy someone else’s terms. It’s illegal and can get you and your business into a lot of trouble, particularly if they are not related to your business which happens often when, for example, many sites copy US legal terms.
You also wouldn’t want someone to copy your website idea, products or services, so don’t copy someone else’s legal work that they paid for.
3. The ACCC is now issuing penalties to non-compliant websites
Last September, the Australian Competition and Consumer Commission (ACCC) decided to randomly start checking e-commerce websites and issuing penalties to non-compliant sites. They found a number of websites that had copied other websites’ terms and conditions. This meant that, in some cases, the terms were either confusing or misleading as they did not pertain to the actual website’s products or services. In other cases, they were general and missing the required Australian Consumer Law requirements.
Since this time, the ACCC has been increasing their review of and enforcement of consumer protection. They are conducting reviews of e-commerce websites and issuing fines to websites that do not comply with terms required and if you do not have terms related to your site.
This is becoming more of a focus for regulators who are trying to protect consumers, particularly with respect to online transactions. Consumers face increasing risks when shopping online rather than in a shop front. Security, jurisdiction, information disclosure and misinformation, redress and privacy are just a few of the issues that regulators try to help consumers avoid.
In addition, there is a high level of awareness of consumer protection laws in Australia. While most consumers are aware of the existence of consumer protection laws (90% of consumers and 98% of businesses according to an Australian Government Consumer survey), only a small proportion can name the existing laws. However, this does mean that there is a higher likelihood that consumers will know they have rights they can complain about and will be more likely to do so.
Think twice about copying
It’s a risk to your reputation and your business which is not worth taking. There are online websites that offer terms and conditions at reasonable prices so it’s not worth risking potential legal action which could ruin your business.