Is Most of Your Business Connected Through Your Website?

September 20, 2016

Then you need to think about your Terms of Service, Privacy Policy and Endorsements.

Many businesses are almost exclusively run through a website.  As a business owner you may have already thought about the legal issues surrounding customers making purchases through your website.  However, in addition to protecting yourself for these online purchases, there are some important legal disclaimers that every website should include.

Terms of Service

Website Terms of Service or Terms of Use are usually found at the bottom of the website and most people do not read them.  However, the Terms of Service act as a contract between you, the business owner, and your customers (or “users”).

The goals of the Terms of Service are to:

  • Protect the intellectual property included on or accessed through the website, for example, by prohibiting unauthorized reproduction of material contained on the website;
  • Ensure the website is not used in ways that may be harmful, including by prohibiting illegal or undesirable user behavior such as:
    • using the website for illegal purposes;
    • introducing viruses; and
    • uploading illegal, infringing or defamatory content;
  • Help your business minimize any potential liability for any loss or damage arising from the use of the website by a customer.

It is important that the Terms of Service reflect the particularities of your business and website.  Therefore, careful drafting is critical to ensure that your business is protected.

 Privacy Policy

Often hand in hand with a website’s Terms of Service will be its Privacy Policy.  As a business owner, a Privacy Policy is essential to protect the business from claims of using their personal information without their knowledge.  A website Privacy Policy notifies your customers/users about the business’ practices concerning the collection, storage, use, and disclosure of information, including personal information.  A well-drafted Privacy Policy will reassure your customers that you are not misusing their personal information.

Unfortunately, there is no standard approach to a Privacy Policy.  Since every website and business collects information and tracks it differently, it is important to specifically reflect your business’ methods in your Privacy Policy.  Additionally, there are specific state and federal laws and regulations that may be relevant to your business and your website and that should be included in your Privacy Policy.  Your Privacy Policy should also match the organizations own internal policies and procedures in relation to the handling of all company and personal information.

Endorsements and Testimonials

If your business relies on customer reviews and endorsements to get more sales, then you need to be mindful of the rules around posting endorsements online.  The Federal Trade Commission has released guides related to endorsements.  The guides are meant to ensure that endorsements are honest and not misleading, i.e. “an endorsement must reflect the honest opinion of the endorser and can’t be used to make a claim that the product’s marketer couldn’t legally make.”[1]  The FTC has specific rules about the required disclosures around an endorsement.  In particular, before posting a customer testimonial, you should obtain that customer’s consent.  As a business owner, you also have to be wary of only posting testimonials where the customer has had better than the typical consumer experience.  Again, careful wording around the posting of your customer’s endorsements will protect your business.  Furthermore, your business may be subject to specific industry rules related to the posting and content of customer endorsements and testimonials.

If you are in need of Terms of Service, Privacy Policy and Endorsements for your website, SMGG can help.  Please contact Ena M. Lebel of Strassburger McKenna Gutnick & Gefsky in Pittsburgh at elebel@smgglaw.com or (412) 281-5423, or any other member of our Business Services team.

 

[1] https://www.ftc.gov/tips-advice/business-center/guidance/ftcs-endorsement-guides-what-people-are-asking