Website Terms
As businesses and marketplaces transition towards new age mediums such as web and mobile, complexities surrounding them also continue to grow.
Appropriate terms and conditions along with privacy policies are critical to every website and mobile application.
Important considerations while drafting terms and conditions for websites and mobile applications are discussed below.
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Limitation of Liability
While drafting terms and conditions for websites and mobile applications, limiting the liability is extremely crucial as no business intends to be held responsible for misleading the consumers. Accordingly, by having appropriate liability clauses, businesses can limit the liability of the business, its directors, officers and employees.
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One way to limit the liability of a business is by explicitly stating in website terms and conditions that information published on the website, while assumed to be accurate, may in fact be incorrect, out of date, or inaccurate to some extent. This is due to the probable reason that any changes in business may not be implemented on the website in real time.
Therefore, it is advisable to mention in website terms and conditions that the information is provided ‘in good faith’ on an ‘as is’ basis, which implies that the information should only be taken at face value and not be relied on to any extent beyond which the law requires.
However, certain information, such as, for example, but not limited to, contact details, is required to be accurate by law across multiple jurisdictions. In addition, website terms and conditions should be drafted to exclude the company, its directors, officers and employees of any liability for any representations or possible warranties.
Another important way to limit the liability of business is to explicitly acknowledge the relevant provisions of applicable laws and agree to applicable rights and remedies available to the consumers of your business. If website is offering products and/or services, such rights should be clearly stated in accordance with laws of appropriate jurisdictions. More specifically, in case of online marketplace business offering products or services through third party vendors, it should be clearly stated as to who is providing such products or services, so that appropriate consumer rights and remedies can be accordingly decided in light of vendors selling their products or offering their services.
Furthermore, with a view to secure business’s interest and appropriately acknowledging consumer’s rights and remedies, balanced website terms and conditions shall be drafted to clearly state all the inclusions to limit the applicability of any implied conditions or warranties, to the extent as permitted by the law. There can be numerous cases where such exclusions can be applied, such as, for example, but not limited to, disclaiming any implied or express guarantees, warranties, representations or conditions of any kind, which are beyond the scope of transactions between the business and the consumers, error free accessibility and use of the website, and the like.
In addition the above, liability of business can further be limited by drafting website terms and conditions in accordance with prices of products and services offered by the website. Various areas of law take into account the consideration, i.e. the price. Such areas of law include, contracts law, law of torts (negligence), equity, and the like.
IP Ownership & Third-Party Content
While drafting website terms and conditions, it is absolutely mandatory to include provisions specifying ownership of Intellectual Property (IP), whereby it should be explained that content (brand name, logo, images, videos, source code, and the like) of the website is protected by applicable Intellectual Property Rights (IPR), including, patents, copyrights, trademarks, and other proprietary rights.
IP ownership provision shall further state that copying, redistribution, use or publication by the user is strictly prohibited except as expressly allowed by other section of website terms. Accordingly, such provisions explicitly define the company’s ownership of website content. In addition, it is also advisable to mention that certain website content may belong to third parties, as and when applicable.
With regards to third-Party content, appropriate provision is required within website terms and conditions to clearly state that the business owner or company is not responsible or liable for third party content in any manner, and does not support or endorse the views stated in said third-party content.
Privacy Policy
Laws and regulations relating to data privacy and data protection are applicable to any business that collects personal information from an individual. In accordance with provisions of applicable laws and regulations, website terms and conditions should include a detailed privacy policy, which shall explain appropriate provisions to inform the user about collection of such personal information and data.
Furthermore, if a website uses cookies to gather information about visitors of the website, the users need to be informed about the same, along with the purpose for which such information is being collected, how such information will be used, how such information will be protected, and what all steps can users take to get their information removed from company’s records. Moreover, it is also advisable to explicitly state the applicable laws related to data privacy and protection of personal data, and corresponding rights and remedies available to the users in accordance with various provisions of such applicable laws.
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Importance of Agreements
Websites and mobile applications are platforms that require legal agreements like terms of use with privacy policy. These agreements and contracts determine the rights and restrictions for the platform users, along with responsibilities and liabilities of the platform owners. Terms of Use and privacy policy are the most important factors of a business online. This policy outlines the responsibilities of an organization, as well as data security issues that have to do with the use of personally-identifiable data by employees and clients.
A company can be found guilty of data protection law violations if it fails to inform users about its privacy policy or terms of use. This is considered illegal in many jurisdictions. A company may also be fined if it doesn’t inform users how they can avoid certain actions such as collecting their personal information. It is not enough that users know the policy and understand how it impacts their use of the service. They need to also understand the implications and how they can exercise their rights in order to protect themselves against unauthorized use of their personal data.
A business does not need to make every effort to educate users about data protection. It should take the initiative to get this information out there, but then give users the options they need to exercise their personal rights. Users may not like being asked for their passwords or having to give out sensitive personal data. This is where a business needs to step up and explain to them the legal consequences of unauthorized use of personal data. A business may also choose to offer training to employees on data protection and how they can handle potential customers’ privacy issues.
Businesses that don’t provide clear and comprehensive policies may find themselves liable if a user ever suffers harm because of the actions of the business. Terms of Use and privacy policies should include an opt-out option for those who wish to remove themselves from ever having to share their information with the business. This allows the user to maintain control over their personal data. If the business won’t let a user to opt out of the policy, then it is probably doing more harm than good to the business’s data protection policies and practices.
When it comes to a business’s privacy policy and terms of use, the company’s responsibility is to explain all of the terms and to ensure that they apply equally to each user of the website. Both the business and the user of the site should be clear on what is covered and what is not. For instance, if the business requires that a user confirm that they are at least eighteen years old before they can proceed to the payment section of the site, it is important that the user fully comprehends this policy and understands that they will probably be required to supply this information at some point in time during the course of using the website.
In addition, when it comes to protecting data on social media platforms, businesses may not always be clear about whether or not they have appropriate and effective ways of protecting the data of their users. Again, a business must take responsibility for its own privacy policies and terms of use. As a small business, it is vital that a business has policies and rules in place in order to protect its data from misuse by users and that these rules and policies are consistently enforced. Without having appropriate and consistent privacy policies and terms of use, a business is putting its users and their data at unnecessary risk. This may also have an effect on the number of new business customers that a business receives, since a privacy policy or terms of use can put potential customers off of using a business’s services. Therefore, while every business is different, the importance of privacy policies and terms of use cannot be overstated in terms of maintaining and attracting new business.
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Advocate Rahul Dev is a Patent Attorney & International Business Lawyer practicing Technology, Intellectual Property & Corporate Laws. He is reachable at rd (at) patentbusinesslawyer (dot) com & @rdpatentlawyer on Twitter.
Quoted in and contributed to 50+ national & international publications (Bloomberg, FirstPost, SwissInfo, Outlook Money, Yahoo News, Times of India, Economic Times, Business Standard, Quartz, Global Legal Post, International Bar Association, LawAsia, BioSpectrum Asia, Digital News Asia, e27, Leaders Speak, Entrepreneur India, VCCircle, AutoTech).
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