Site Use Agreements - Is Your Site Safe?

Terms of Purchases or Services Provided

The clickwrap agreement should obtain the user's agreement to any policies regarding the purchase, including warranty, shipping, returns or otherwise, of products and/or services. It is important to be aware that FTC regulations and other laws govern sales of products over the Internet, as they do mail order and store purchases.

Waiver of Implied Legal Warranties

The clickwrap agreement should include language that waives legal warranties that are implied by law regarding the sale of products under the Uniform Commercial Code.

The UCC implied warranties include the following:

• merchantability (that the item will do what it is intended to),
• fitness for purpose (that if the item's fitness for a particular purposes is stated, it will meet that purpose),
• non-infringement (that the product does not infringe other parties' rights) and
• title (that the seller owns what she is selling).

These warranties apply to your product sales unless they are waived in writing that uses UCC-required language.

Liability Limits and Postings

The clickwrap agreement can involve language that limits your company's liability if it is sued for damages of all kinds, including:

• use of the site,
• errors on the site,
• viruses on the site or products,
• failure of the site to operate,
• third party links, and
• any purchase or service.

This is extremely helpful in lowering your risk while engaging in ecommerce business.

Site postings can have a lot of liability associated with them. Users may post materials that are libelous, obscene or infringing of a copyright or trademark, and sites can be liable for these postings.

Therefore, it is vital to incorporate site submission rules and the liability limit into the clickwrap agreement, and be sure that anyone who can post agrees to it as the case law sets forth. It is also helpful to include a provision that permits disclosure of user information to law enforcement authorities or as a result of subpoena.

There have been cases where allegedly libelous information is posted and the hosting site is subpoenaed for the identity of the poster. Sometimes, if the hosting site complies with, or is going to comply with, the subpoena, the site is sued by user for revealing their identity, or in order to stop the site from revealing their identity. Having users' consent to this disclosure in a clickwrap agreement can help avoid that scenario where the site is stuck between a subpoena or law enforcement, and a user law suit.

Shifting Responsibility to the User

The clickwrap agreement can also require that your users indemnify the company for any claims that result from the user's use. This means that if the company is sued due a user's actions regarding the site, the company has a way to sue the user and require the user to pay for any costs that the company is forced to pay in the law suit with the third party.

Conclusion

Clickwrap agreements can offer tremendous legal benefit both in lowering risk and ensuring remedies for Websites. However, be sure to prepare your agreement through an attorney or reputable legal forms retailer who'll provide you with information on how to post the agreements so that they're binding under case law. Simply throwing the terms on the site does not make them binding on users!

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.