Legal Guide for your Online Business

Legal Guide for your Online Business - Online Shop or Store

This Legal Guide for your Online Business answers many of your burning questions. It provides recommendations on how to protect your brand and business, how to comply with the law, and recommendations for what to include in your online store terms and conditions, website terms and conditions and a privacy policy.

Legal Guide for your Online Business – I’m just starting out, and need some guidance

What business structure should I be?

When you are starting out, it’s good to keep costs down, so often you will decide to start as a sole trader, or partnership. However, if you want the benefit of limited liability (which generally means that your responsibility is limited to the amount invested in the company) to help protect your personal assets,  start investigating whether a company structure, or trust structure is right for you. You can read more about business structuring here.

How is selling online different to selling in a physical shop? 

Selling online is legally no different to selling in a shop, and the same laws apply. This means the Australian Consumer Law in particular applies to all online sales. You should be aware of your obligations under the Australian Consumer Law. You can read more about e-commerce generally here.

Are there any laws I need to comply with before selling my products? 

Yes. You must be aware of the various safety standards, and labelling requirements before you start selling. The ACCC has an extremely useful website here where you can get detailed information to ensure that you comply with the law.

 

Legal Guide for your Online Business – I’m setting up my website

Should I organise a contract with my website designer? 

Yes, we recommend that you do. This is because you want to be sure that you own the intellectual property rights in the website once you have made your payment. A contract will ensure that you own the rights in any content that is developed for you. It will also include special clauses like indemnities that they aren’t infringing on anyone else’s rights (eg by stealing a third party’s photo for example).

Can I use any pictures of products?

When you use pictures you need to ensure you have a licence to use them, and that licence is sufficiently broad. For example, you might pay to licence the copyright in a photo, but the licence doesn’t allow you to use it for any advertising, or commercial purposes. It is important to check that you have a sufficiently broad licence to use all your photos, graphics, vectors and illustrations in the way that you want to use them.

Do I need online store terms and conditions?

Yes. Terms and conditions will help protect the copyright in the content in your website, and protect you against claims from website visitors, and customers of your online shop. You also need them to comply with the Australian Consumer Law. There are many other benefits to having online store terms and conditions. Why not take a look at our Online Store Package which includes online store terms and conditions and general terms for your website visitors and more.

Do I need a privacy policy on my website?

Yes, it is good business practice for online stores to have a policy that complies with the Australian Privacy Principles. It promotes trust with your customers by providing transparency about what information you collect, and why, and how you store it. If you have customers in the EU, you will also need to comply with the General Data Protection Regulations (GDPR). Our Online Store Package includes a privacy policy to assist with compliance.

Can I send out automated promotional emails? 

Yes, you can. However you will need to make sure you comply with the Spam Act 2003. You can comply by ensuring you have consent to send messages to your contacts, (this is usually by a tick box when they sign up or optin). You also need to clearly identify your business within the email, including who is sending the message and how they can be contacted, and include an “unsubscribe” button to enable recipients to easily opt out.

 

Legal Guide for your Online Business – I want to protect my brand and IP

Should I register a trademark?

Yes. Registering your business name doesn’t give you exclusive rights to use that name, and neither does registering a domain name. You should register a trademark to gain proprietary rights in the name. This will mean you can stop copycats in the market, and you have will have the right to use, licence and sell the mark. To help protect your business name, and product names, trademarking is definitely worth looking into, and you can read more here.

Can I stop people copying my website and store?

Yes, you can. The best way to stop people copying your content and photos is to have website terms and conditions which highlight the ownership of intellectual property rights. (Intellectual Property includes trademark rights, copyright, design rights, patents and more). The terms should alert people to the civil and criminal penalties that can occur when intellectual property rights are breached. You should also take swift action if someone does copy you by sending a cease and desist letter asserting your legal rights. You can read more about intellectual property here.

 

Legal Guide for your Online Business – I’m starting to trade online

Do I need a credit card authority for my customer to pay in instalments?

Yes, you need an authority from your customers to take a payment from their credit card. This should be written into your online store terms and conditions so that you can confidently take payments into the future.

 What happens if the colours of the actual product are different to the colours on my website?

Whilst you should not mislead customers as to the colours, often there is a difference between the photo you have on your website, and what the user sees. Therefore it is a good idea to also state the colour of the product in your product description. You should also have online store terms and conditions that warn customers of this possibility.

What happens if I run out of stock, and have no more products available for my online shop?

If a customer has paid for an item and you run out of stock you will need to refund them. You cannot publish that you have more stock when you don’t or limited stock when you don’t because it is against the law to mislead your customers.

What happens if a delivery doesn’t make it on time?

Whether you have to give a refund where the delivery time is wrong will depend on the online store terms and  conditions on your website. As it is out of your control, it is a good idea to indicate that any issues with delivery should be resolved with Australia Post or your courier company. Keep in mind it is against the law to mislead your customers, so it is really important to always publish clear and accurate delivery times and charges as much as possible; don’t say it will arrive within 2 days if you know that it never does.

What happens I make a mistake in my product description or price?

You will have to give a refund to any customer who relied on the wrong product description. Whether you have to give a refund where the price is wrong will depend on the online store terms and conditions on your website. However, it is against the law to mislead your customers, so it is really important to publish clear and accurate prices as much as possible.

 

Legal Guide for your Online Business – I’m confused about when to give a refund

Do I have to give refunds?

Yes, but not all the time. The Australian Consumer Law applies to all online products bought from Australian businesses and gives customers various rights to a refund. You will need to give a refund where a product is not of acceptable quality, or does not match a description you provide. There are also other occasions where you may need to give a refund. If you’re not sure if you need to give a refund, please message us here.

 Do I have to give a refund if a customer changes their mind, or finds a cheaper product?

No. There are some times when you don’t need to give a refund, for example if a customer changes their mind, or if they find a cheaper priced product elsewhere. However, if you advertise that you have the cheapest price, it would be misleading if you did not sell the product at the cheaper price. Misleading customers is against the law, so always make sure your prices and product information is as accurate as possible.

Does the customer have to return the product to me in the original packaging to get a refund?

No. Customers do not have to return the product to you in the original packaging, no matter how pretty the packaging was. However, you can request some proof of purchase from the customer, such as an invoice or receipt.

 

Legal Guide for your Online Business – Website ins and outs

Do I have to notify customers of changes to my website or updates? 

No, however if there are major changes to the way your business runs, you may want to notify them anyway. Your terms should also include that you are not liable for any interruptions to your website when you are making changes, are updating it or otherwise.

What happens if a customer finds an old landing page with old irrelevant information?

This will depend on your terms and conditions. Your website terms and conditions should provide that if any content is outdated and a customer relies on that information, you are not liable. However, keep in mind that it is against the law to mislead customers, so if they are misled, you may have an issue. It is wise to keep your website up to date with current information as much as possible.

Am I responsible for other websites that I provide a link to? 

This will depend on your website terms and conditions. Whilst you may endorse, or want to promote the websites that you link to, the material they post on their website is out of your control. For that reason, your website terms and conditions should provide a disclaimer that you are not responsible for any other website’s content. The disclaimer should also provide that any purchase from that third party is a contract between them and the third party, and you are not involved.

Am I responsible for people’s comments and posts on my website?

Again, this will depend on your terms and conditions. Your website terms and conditions should indicate that you can edit, copy and use the posts or comments in any way. You can also set out some rules about what people can and cannot post; for example, you may not want any advertising, or offensive content. It is also a good idea to provide an email address so that if anyone has any concerns about comments or posts on your website you can address their concern immediately; this is often the quickest way to address anything offensive or defamatory.

Am I responsible for guest bloggers?

This will depend on your website terms and conditions. If you have terms and conditions that include a disclaimer that the person who posts is liable for their own posts, not you, then you will not be liable. If you are engaging people to write blog posts or other content you should also have a separate agreement with them that sets out their obligations and promises. These will include promises that they haven’t copied someone else.

Am I responsible for third party apps and software I use?

Yes, however, you can limit that responsibility by including disclaimers in your terms and conditions that website visitors use them at their own risk, as there maybe some instances where they don’t work or are bugged.

Do I have to notify customers or website visitors of changes to my website terms and conditions?

Yes. Particularly if you are changing your legal terms and it will have a negative impact on your customers, we recommend you notify them.

Can I stop people linking to my website?

Yes. The best way to stop people linking to your website is to have website terms and conditions which include provisions not allowing any linking to your website. You should also take swift action by sending them a formal letter if someone links to your website.

 

Legal Guide for your Online Business – Other issues

Can I sell my online store? 

Yes you can. If you decide to sell, you will want to be the owner of all the intellectual property rights in the website (which is why a contract with your website designer, any copywriters, bloggers, photographers, videographers etc is important). You will also want to ensure your legals are in place, such as having up to date website and customer terms and conditions and a privacy policy. Having registered trademarks are an asset on your balance sheet and can increase the value of your store if you consider selling.

Can I stop my website?

Yes. If you decide to take down your website, you want to be able to do so freely at any time. Your website terms and conditions should say that you can stop the website at any time and are not liable if you do so.

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