Most distributors have a sophisticated internet presence; and many, if not most, do business (i.e., sales transactions) on the internet. Doing business on the internet has inherent risks, many of which can be substantially minimized by establishing clear contract rights with prospective and actual purchasers. So called “e-tailers” can also protect their e-commerce activities by well crafted privacy policies, terms, and conditions of sale (e.g., shipping and refund policies, etc.), and legal notices. This article identifies some of the best practices, derived from the ever-evolving law of e-commerce, to limit risk, exposure, and litigation for the operators of e-commerce sites, particularly if the site is one where customers can purchase products (and/or services).
What Is the Big Deal?
While e-commerce law is still evolving, doing actual business on the web generally subjects all businesses to jurisdiction in all 50 states (unless limited by the terms and conditions of use of the e-commerce site). While many distributors are already doing business nationwide, their internet presence only further secures the risk of claims brought in other jurisdictions. To boot, all of the laws that apply to old-fashioned “paper” transactions apply to e-commerce transactions — for example, the Uniform Commercial Code as to the sale of goods applies to transactions on the internet. Thus, e-retailers should ensure that their websites are state-of-the-art from a legal perspective. Such protections can run from warranty and damage disclaimers to use of third party sites accessible through the e-tailers site to choice of law, forum, and the arbitration provisions or jury waivers.
How Important are Terms and Conditions of Use?
- “Web masters” should ensure that visitors have a sufficient opportunity to review the terms and conditions of use before finalizing their online transaction, at the reader’s “own speed.”
The Import of a “Meeting of the Minds”
Without over-complicating traditional legal principles, a contract can be said to exist when there is a meeting of the minds between contracting parties as to essential and/or material terms. Securing a meeting of the minds is equally important in cyberspace but is detached from the way in which old-fashioned contracts have been formed — even the classic purchase order and acceptance forms used in traditional product purchases. Best practices for e-commerce sites suggest that:
The Import of Accurate Records
- Make sure that the website owner can prove a meeting of the minds, including the visitor’s identity (without running afoul of privacy laws).
- Ensure compliance with applicable legal retention policies and/or those of the brick and mortar business of the e-commerce site owner.
- Ensure that the visitor can print and store a record of her purchase transaction.
For distributors who wish to discuss these issues, please contact Fred at 312-840-7004 or firstname.lastname@example.org.