The process of selling a product to a customer online is a legal transaction, a form of contract. The terms and conditions of an online store must be tailored to create binding language surrounding the key issues involved in the sale.
Ah, aren’t all terms and conditions the same? In a word – no. While one can often use pre-printed legal forms offline to handle transactions, the same is not true online.
The problem is contract law is governed by state law. When you use a form invoice purchased at your local office supply store, the form is written to comply with the laws of your state. The vast majority of visitors to your online store, however, are not going to be located in your state. This makes blanket forms not only useless, but dangerous as the terms in them may violate the laws of the state either you or the customer is in. Don’t use this junk!
The terms and conditions for an online store tend to be lengthy. The reason is there is much to cover in the financial transaction. Basic issues include:
- Return policies,
- Pricing policies,
- Shipping policies,
- Sales tax collection practices,
- Payment processing procedures,
- How customer payment information is secured,
- How copyright infringement claims are handled [DMCA],
- Trademark notices,
- Customer account obligations [sharing account with others],
- Linking to third party site policies,
- Disclaimers of warrantees and guarantees,
- Choice of forum clauses, and
- Other clauses specific to your site
Each of these must be tailed to your actual practices and the laws of your state. Failure to take this step can leave a site exposed to attack.
It is important to understand the terms and conditions for most sites are wrong, even the big boys. Zappos had its terms invalidated in 2012 and is now staring at a staggering multi-million dollar class action lawsuit. You don’t have to be a large company to suffer the same fate.
Customization A Must
The terms and conditions for any online store must be customized to reflect the practices of the store. If you fail to take this step, you are essentially dropping to your knees and asking to be sued. It is that simple. Contact me today for a free consultation to avoid the fate of so many companies online that have terrible terms and conditions.
Richard A. Chapo, Esq.