Online Stores – the legal considerations

Starting or running an online store is more complex than it appears. There are various aspects and different issues to consider. However, there is always a limited amount of time and budget. For this reason, the legal considerations often get ignored or put on the to-do list.

By online store we mean every supplier providing goods and services by way of an electronic transaction. Goods and services cover everything.  Everything that can be provided is either goods or services.  So widgets, books, stationary, CDs are goods.  Services includes information services and Software as a Service (SaaS).

Electronic transactions include not only transactions conducted via a web site but also transactions concluded by e-mail and SMS. Sometimes they are also called web stores or e-tailers short for electronic retailers. A web site with a shopping cart facility (basket and checkout) from which goods or services can be purchased (hired or exchanged) directly is an online store.  But in terms of our law, a vendor that concludes transactions (in whole or in part) by e-mail or SMS is also an online store.  Such vendors often have a brochure or catalogue web site.

Well, let’s have a look at what the legal considerations relating to an online store are?  Here is a list of some of the laws:

1. Consumer protection laws. The Electronic Communications and Transactions Act (ECT Act) contains provisions relating to consumer protection in the case of an electronic transaction. The Consumer Protection Act that commenced on 1 April 2011 also has a direct impact.
2. With regard to privacy and the protection of personal information, the ECT Act also contains relevant provisions.  A draft Protection of Personal Information Bill has also been published and is expected to be enacted before the end of this year.

So what legal notices should appear on an online store?

• Terms and Conditions or Customer Relationship Terms. Some people call these Terms of Service, Terms of Use, or Terms of Sale.  We prefer Customer Relationship Terms because what you really want to do is manage the relationship with your customer.  You also want the terms to be broad enough to cover the provision of both goods and services.  The Customer Relationship Terms deal with issues like the use of the online store, the protection of the web site and intellectual property, the disclaimer of warranties, the giving of guarantees, the limitation of liability, the applicable law, and the conclusion of the actual agreement.
• A Return Policy specifying the manner in which products can be returned.
• A Privacy Policy is also essential. It should specify in detail what personal information about your customers you connect and how you process it in order to fulfil their orders. It is also the mechanism by which you obtain the consent of your customers to process their personal information.
• A Security Policy sets out the security measures that you have in place regarding your online store.
• A Copyright Notice should appear in the footer of your online store to ensure that people are aware that all of your rights relating to your online store are reserved.

Sure, you could copy and paste the legal notices from another online store. The problem with this though is that you will be infringing somebody else’s copyright, the legal notices might not protect you and they may well be out-of-date. Further, if you try to amend them yourself, you don’t know that the amendments will be correct. You want to do it properly. Most people do because they understand the importance, but it’s the budget that’s a problem. The budget simply does not allow for it. Well, that was until now.

For these reasons we have developed a set of templates for an online store including:

• templates of all legal notices that you require for the standard online store;
• e-mail templates that an online store should use (including a template acknowledgement of receipt, offer rejection, order confirmation);

The templates are available for download in editable format. Click here to order.

We also provide online legal guidance relating to online stores, including telling you the Info that must be on your web site.

Tags: electronic commerce, internet business plan, legal solution, online store, online stores, terms and conditions online store