How to Audit your Website’s Legal Risks: A Practical Checklist. . .
Based upon my experience as an international business lawyer and business developer, many companies do not place the same emphasis on legal risk management when it comes to websites as compared with business contracts. In light of this, I thought it would prove useful to compile a list of legal issues pertaining to websites. This way, you can audit your website and assess what, if anything, should be done. There may be other issues but this should be a decent start. Naturally, this article should not be a substitute for a thorough legal review of your website.
Have you Secured Ownership of the Website?
If created by an employee during normal working hours and with the use of work-related equipment, the website will generally be treated as owned by the company. With this said, local rules apply.
If created by a consultant, the website will generally be treated as owned by the consultancy firm if not properly assigned to your company.
Can you Access the Website to Change Content and/or Hosting?
If you do not have a copy of the completed website within which changes can be made, this can prove problematic if you decide to replace your web-developer.
In your hosting agreement, are you permitted to access your website or do you have to go through a web-developer? You should be able to access your website yourself.
Have you Secured Alternative Domain Names?
Obtaining a .com is generally advised for international business. With this said, other extensions, such as .org, .net, .biz, and other local references should be considered as well, in order to avoid situations where another company secures such domains and causes confusion as to which company is your company. Additionally, securing domains with variations on spelling or the use of hyphens between the words should also be considered for the same reason.
Are your Contact Details Prominent?
In many, if not most, jurisdictions, a corporate website owner is required to include contact information consisting of the official name of the company, the company’s headquarter address, as well as an email address and/or telephone number.
Do you have a Legally Sufficient Privacy Policy Posted on the Website?
A privacy policy is a legal document disclosing the ways a your company gathers, uses, discloses, and manages visitor’s or customer’s data as well as the options available to the visitor or customer with regard to foregoing the disclosure of its information. The privacy policy fulfils a legal requirement to protect a customer or client’s privacy. The privacy policy should be conspicuously located so a website visitor can easily access and review the details. Further, a website visitor should be clearly instructed about whom to contact with any questions.
Intellectual Property- Are you Reasonably Limiting Risks of Infringement?
Trademark: Merely securing a domain address does not automatically confer trademark, service mark or tradename status to your company. Trademark status generally requires trademark registration. In light of this, before going live with a website targeting sales of products / services in multiple jurisdictions, it is advisable to secure trademark protection in such jurisdictions. Another issue can arise in using third party trademarks. Any such use of third party trademarks should be authorized in writing.
Copyright: With regard to the content on your website (e.g. text, photographs, drawings, graphics), has your company originally created such materials? Again, if created by an employee during working hours, the content is likely owned by your company. If created by a consultant, however, an agreement should be in place assigning the ownership of such materials to your company. In the event your website incorporates any third party content, it is imperative to ensure such third party content is used permissibly (e.g. the information is in the public domain, within a fair use exception to copyright protection or otherwise has been approved for incorporation by the copyright owner).
Linking, Deep Linking or Framing: While merely hyperlinking to another main homepage URL is not typically considered a copyright infringement of the linked to website, deep linking (i.e. to specific content on a website) and framing (i.e. capturing a frame of content (via, for instance, an automatic hyperlink) from another site and displaying the same on your site) can constitute infringement. Have a look at the target website’s terms of use as these issues may be regulated therein. It is advisable to obtain written consent if there is any uncertainty as to whether the use in question is copyright protected.
Have you Posted Legally Sufficient Terms of Use (a.k.a Terms and Conditions)?
As explained above, the Privacy Policy regulates how you handle a visitor’s or customer’s personal data. Terms of Use, on the other hand, regulate other interactions between your company and such visitors/customers.
The Terms of Use should be prominently accessible on your website. In the Terms of Use, you should, among other things, (i) reserve all rights to your intellectual property (e.g. trademarks and copyrights) except any specific uses you would like to permit, (ii) limit liability (to the extent legally permissible) in connection with information on your site (as well as pertaining to any other websites which can be hyperlinked to via your site), (iii) if you are endorsing any third party products, services or companies and receive compensation for doing so- inform visitors that you may be compensated, (iv) if you are selling anything from the website- provide the terms of sale that apply, (v) if visitors can post any information on the website, stipulate requirements and prohibitions relating thereto and the right to remove the posts, (vi) require a “customer” to be 18 years of age, (vii) disclaim any liability for third party advertisements on your site, and (viii) if providing any advice (e.g. financial, medical, legal, etc.), provide a disclaimer and state that no professional relationship is entered into by virtue of such information or activity on the website absent an agreement to the contrary.
Should you have Terms of Sale?
Terms of Sale are different than Terms of Use. The Terms of Sale is essentially the legal document capturing the agreement between the customer and your company with regard to a certain transaction (i.e. subscription, product purchase, service purchase or the like). To ensure your company’s legally protectable right to compensation and to limit your company’s exposure to liability, such Terms of Use should be required to be actively accepted (i.e. by scrolling down the terms and ticking an acceptance box). This should be part of the purchasing process and an order should not be placeable without the box being ticked.
Additionally, you should have a process in place to capture a copy of the Terms of Use with a date stamp at the time accepted by the customer (as well as a clear identification of the customer as having accepted).
Are you Running Contests on your Website?
If you will offer any contests, terms and conditions relating thereto should be treated like terms of sale. All material issues should be set forth and must be accepted “actively” by each participant prior to being able to participate. You will have to clearly explain how many prizes will be awarded by whom and to whom, the value of such prizes, whether anything will have to be paid (and this can be anything such as money, an endorsement, a “like” on FB), alternatives to such payments, who owns anything submitted by contestants, whether the name or likeness of the winners will be used in any manner, limitations of liability in the event any prize is damaged or the stated product cannot be awarded (whereby the company shall have a right to reasonably replace). Companies frequently overlook legal issues in contests. It is best to work with legal counsel to create a template structure and approach which can be swiftly adapted and reviewed for future contests.
In closing, it is always best to have legal counsel run through and conduct an audit on your website. Additionally, legal counsel should produce the Privacy Policy, Terms of Use, and Terms of Sale for the website. Cutting and pasting from other sites is a recipe for problems down the line. At B2World, we aim to simplify your company’s business / legal needs whether domestic or international.
Thank you for your interest and best of luck with your business!
*This article is not legal advice and is provided for general information purposes only.
