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How to Protect your Online Businesses?

Last revision:
Last revision: October 26, 2021
Last revision:
Category: Intellectual Property and New Technologies

Nowadays, most businesses have either turned completely to online platforms or are doing both online and offline business. Doing business online has many advantages like lack of geographical barriers, cost-effectiveness, flexibility, etc. But on the other hand, if you do not have the right policies in hand to specify the terms, the online business may turn into a nightmare. In this guide, we will discuss the steps and policies required to be taken to protect online businesses.

Setting the rules of the game

The terms and conditions are a legally binding contract between the website owner and the users. Even though the terms of the business varies depending on the type, size, area of business, etc. the standard terms are applicable for most of the businesses. Having a properly drafted term of use will help you to protect your business from unwarranted liabilities and costs.

Even though it is not mandatory to have terms and conditions under the law, it is advisable to have one to avoid any legal actions or complications in the future. It is a common misconception that the terms and conditions are only applicable for big companies or for that reason an e-commerce or social media sites, but in reality, it is better for even the small entities having an online presence to have well-drafted terms and conditions to be on a safer side.

1. Benefits of having terms and conditions for your website

  • Clarify the rules

The users are required to agree and comply with these terms to use the website. Thus, the users cannot say that they were unaware of the rules of the website. This includes the guidelines regarding the proper use of the website and contents created by the users. Different websites will have different terms, thus, it is better to mention the accepted and unaccepted behaviour on the website by the user.

  • Restrictions on users

This includes restrictions against spamming, posting defamatory content, infecting the website with malware, using the platform for illegal activities, etc. The actions taken in case of violation of terms of the Website can also be included like suspension of account, termination of accounts, etc.

  • Don't lose the valuables

Despite the size and type of the business, logo, name, contents of the website, design of the website, and so on are irreplaceable assets of the business. In the terms and conditions, you can specifically mention that the website and its contents are the exclusive property of the owner and are protected under the respective copyright acts. The users will be restricted from using/sharing such content without explicit permission from you.

  • Don't lose the money

Since the website can be accessed by any person from anywhere in the world, it is better to specify the limit of the owner's liability. If not mentioned properly, in some jurisdictions, the owner of the website may be sued for the inaccuracy of the information provided on the website. Thus, under this section, you can mention that the owner does not take any responsibility for the accuracy or correctness of the information. This is also applicable in case if the website is down for some reason and the users have incurred some direct/indirect losses due to it. In that case, the disclaimer citing liability will help you from getting sued or paying damages to such users. Even if you have to pay damages, you can limit the liability to an extent as mentioned under the terms and conditions.

2. What all are the important clauses under Terms and Conditions?

  • Acceptance

The acceptance of the website terms is implied by accessing and using the website. But, in some jurisdictions, it is required to have explicit consent from the user by clicking and accepting the terms. Under this section, the user will be informed of his/her implied acceptance of terms by using the website.

You can also specify the age restrictions on the website and parental control requirements. This helps you to avoid reaching the contents of the website to the unintended audience and legal complexities followed by it. For example, in India, a person below the age of 18 are not allowed to enter into a valid contract and access certain content online, thus, by displaying the age restriction, you can protect your business from unwarranted legal consequences.

  • Intellectual Property (IP)

Under this section, you can mention that the contents of the website including trademark, copyrights, trade secrets, etc. are owned by the website owner and by using this site the users are not granted any such rights. Under this section, the users are required to agree that they will not infringe the IP rights of the owner and in no way will misuse/reproduce the IP in the website. Apart from the above, the users are also required to give consent to use the data and materials posted by them on the site. Thus, you don't need to have separate agreements to use/process the contents uploaded by the users on the website.

  • Sale of goods/service

If the product/services are provided through your site, it is better to disclose that the information/contents provided on the website may have slight variations. You can also specify that there is no specific warranty regarding the usage of the product or on the results of the service provided. You can also specify that the owner will have absolute authority to change the quality, quantity, payment method, delivery method, etc. at the discretion of the owner without issuing any prior notice to the users.

It is always better to mention the shipping/delivery/return policy in terms and conditions to avoid any confusion between you and the users and to avoid any possible legal issues in the future. Having a clear policy in this regard including delivery conditions, how long the return window is open, return conditions, refund period, etc. will help both the users and business to have a good long-term relationship.

  • Third-party contents

You can specifically mention that you are not responsible for the acts of any third party sites/apps linked through your website. This will send the message that the users are using the third-party links/services at their own risk. Under this section, users will be informed that once the user clicks on any such third-party sites, the terms and conditions of such third-party sites will be applicable.

  • Modification

You can specifically mention that you have the absolute right to change these terms, contents of the website, design of the website, other policies, etc. without giving any notice to the users. You can include the last updated date on top of the terms and conditions. Once the terms and date are updated, continued usage by the user implies their consent to the updated terms.

The users will be informed that their use of the Website is at their own risk and the website owner does not warrant anything like compatibility, usages, merchantability, etc. This also includes data loss, website downtime, the accuracy of the information, etc. Thus, having mentioned the above, the users cannot unnecessarily sue you for any direct/indirect losses in connection with the Website.

Protection of privacy

The privacy policy is a mandatory document for all businesses having an online presence. Under the privacy policy, you can specify how the data is collected, what data is collected and how it is stored and retained. In India, it is mandatory under the Information Technology Act, 2000 to have a privacy policy for every business doing online business. It is also mandatory to get consent from the users before collecting and processing their personal data online.

If you are doing business in the EU region or have the users from EU region, it is better to use GDPR compliant privacy policy.

If you are doing business in the US or have users from the US, it is better to use the US compliant privacy policy.

Privacy Policy is a detailed document explaining how the owner of the Website/Application deals with the personal information of the users such as the details about the uses of information, how the information is collected, what information is collected, retention and deletion of information, age restrictions, security methods adopted, etc.

1. Benefits of having a privacy policy

  • Let users know of their data

Nowadays most people are concerned about their personal data and privacy. Under the privacy policy, you can mention what all information is collected from the users. This will help the users know about the information collected by your website and take appropriate decisions to continue using the website or not.

  • Impart confidence among the users

By informing the users about the data collected and how it is processed will impart confidence in them and will help in creating a long-term good relationship with them. Especially, when you are collecting a lot of personal information, the users will be vigilant about its usage and processing. By letting them know of the purpose of such data collection, processing and storage, such doubts and issues can be rectified.

  • Stay away from legal complications

Under the Information Technology Act, 2000, it is mandatory to let the users know of the collection and processing of personal data. Thus, by having a drafted privacy policy, you can avoid penalties under the respective laws and make the business more in compliance with the applicable laws.

2. What are the important clauses under a privacy policy?

  • Type of personal and sensitive personal data or information collected

The personal information collected from users varies from website to website. It is important to mention what all information is collected from the users of the website. Especially if the information collected is sensitive like gender, religion, political affiliation, ethnicity, etc.

  • Purpose of collection and usage of such information

Under this section, you can specify the purpose and usages of information collected from the users. This will help the users to understand how their data is used and processed by the website. Specifying such information will impart confidence and trust in the users and will help the business to grow in the long run.

  • Disclosure of information to the third parties

Under this section, you can mention to whom the information collected will be revealed. Generally, such information is shared with service providers on a need to know basis. But, clearly citing the information about such revelations will help you to avoid any legal disputes in the future.

  • Reasonable security practices and procedures adopted and so on.

Every user will be concerned about the personal data provided on the website. Under this section, you can specify the data protection tools adopted on your website like SSL, PCI, etc. Mentioning such tools and measure to protect data will increase the confidence among the users to provide their information and interact with the Website.

Reasons to have a cookies policy

The cookies policy is a policy used to explain the cookies collected and processed from the users of your website. Cookies are small files that store the user preferences to improve the user experience on the website. Cookies Policy is applicable for any type of industry having a public website where the users can visit and interact.

If you are doing business in the EU region or have EU users on your website, it is better to adopt a GDPR compliant Cookies Policy on your website.

1. Benefits of having a cookies policy

Imparting confidence among the users

By letting know the users of the cookies collected when they use the website will impart confidence and trust among them. By clearly mentioning the collection, usage and processing of cookies, the ambiguity in the minds of the users will be cleared and they will show more confidence in using your website.

2. What are the important clauses under a cookies policy?

  • Types of cookies used in the website

Under this section, the users will be informed of various types of cookies used in the website like required cookies, functionality cookies, analytical cookies, etc. Under this section, the users will be informed of the reasons for collecting and processing each type of cookie. Thus, a user of the website can easily scroll through the cookies policy to understand what all cookies are used under your website.

  • How the cookies are used

Under this section, the users will be informed of how the cookies are been used and for how long they will be stored. Most websites use basic cookies which are required for the proper functioning of the sites. But, in certain cases, you may have to use certain special cookies for further development or improvement of the website or business. In that case, it is always better to let the users know about such collection and processing of cookies through simply drafted cookies policy.

  • Third-party cookies

Approved third parties also may use cookies on the website. Nowadays, most websites have third-party cookies like a google search engine, Facebook links, etc. These are used for availing the third-party services like ads, delivery, communication, etc.

  • Consent

Even though it is not mandatory to ask for the consent of the users before collecting and processing their cookies. It is always better to get the consent of the users through any methods like click-through, wrap through, sign-in through agreements. But, under the cookies policy, the users will be informed that, if they don't give consent to use cookies (especially required cookies), they may not be able to continue using the website.

Conclusion

Thus, to protect your business from unwarranted legal issues, it is always better to adopt well-drafted terms and conditions and other relevant policies like privacy policy and cookies policy to inform the users of the website policies and terms. Having well-drafted policies will not only keep the users updated about the terms but also will help impart confidence and trust among them.

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