Legal Issues for eCommerce Business

The Website

Clickwrap Agreement for Users: An agreement with your users as part of the purchase process gives you a legal remedy (for breach of contract) to ensure:

• that you will be paid,
• that you waive legal warranties that are implied by law into sales of products of goods,
• that you may disclose users' identities to government authorities upon request (there have been law suits to prevent this, or as a result of this),
• that the user is over 18 and a US citizen,
• that the site may only be used as permitted,
• that venue and jurisdiction for disputes are in whatever state you prefer,
• that there are limits to your civil (anything other than criminal) liability,

...and more.

Historically, if the steps outlined in case law have been followed, these agreements have been upheld as binding. This can be very important as your merchant bank will issue credits for any disputed Internet transactions unless you have hand signed documents from your purchaser. While a clickwrap agreement will not change the merchant bank policy, it will give you a way to go after the purchaser and demand payment under the contract. For more information, see Site Use Agreements - Is Your Site Safe?

Federal Trade Commission (FTC): the FTC regulates trade and commerce with regard to consumers. The FTC monitors businesses to ensure:

• truthful advertising,
• that mail-order, catalog and Web product purchase guidelines are followed,
• that sweepstakes and contest are conduct in compliance with the law, and
• that collection of consumer data and privacy policy guidelines are followed.

All Websites that collect consumer data should have a privacy policy. If you ship physical products or conduct online auctions, you should familiarize yourself with other FTC regulations in these areas. You can find information at www.ftc.gov.

With a little work, you can do a lot to lower your risks of doing business on the Web, and make your business profitable too.

Readers are cautioned not to rely on this article as legal advice as it is no substitution for a consultation with an attorney in your state. Based on jurisdiction and time, the law varies and changes.