How to protect your online business
We are familiar with online purchases, virtual stores and shopping apps.
The “I AGREE” button to the terms and conditions is just as familiar and has become a common reaction but
STOP! Think for a second!
Would you usually just sign any business agreement placed before you?
Effectively, this is what you are doing and, by doing so, agreeing may have severe legal implications.
Let’s use the Master E-Commerce Website Terms and Conditions as an example, deliberately referred to as “the Master”. The Master is also known as “click-wrap” or “web-wrap”.
From an e-commerce or virtual store owners’ point of view, this is your document which controls and regulates ALL of your online business relationships.
From the user or consumers’ perspective, this is in place for your protection and so that you know your rights.
All standard legalities are applied just as when signing an agreement on paper in black and white. Over and above the standard legalese, such agreements also incorporate clauses not traditionally regarded as commercial in nature, such as setting up an account for e-mail services or a social networking website.
When clients approach us about their online business and enquire about the best protection, we start researching various sources to compile the Master and related documents in a specific sector. These sources include the website developer’s website specifications, E-commerce and online reselling websites (RSA and internationally), open-source websites and related software products. Taking all of these sources into account, we draft the Master accordingly.
Naturally, all the legislation is also considered. The consideration includes common law, contract law, Electronic Communication and Transaction Act 25 of 2002 (“ECTA“), Consumer Protection Act 68 of 2008 (“CPA), Promotion of Access to Information Act 2 of 2000 and Protection of Personal Information Act 4 of 2013.
Website services, terms and conditions, and online agreements are challenging because not all of our legislation has been adapted for these businesses. However, through legal principles in general and the laws mentioned above, it has become common practice in our law that these types of agreements could be enforced and protect the online business owner in the form of liabilities, indemnities and disclaimers.
In the precedent set in the Mercurius Motors Case, the Court determined that;
“A reasonable party seeking to rely on such Master terms should, at the very least, make reasonably available a copy of the relevant documents referred to and also ensure that any unusual provisions in such documents are written in a manner which can be reasonably understood and pointed out to a consumer.”
ECTA also provides a solid framework for the regulation of click-wrap and web-wrap. There is no clear reason in law or principle why these agreements should not generally be considered valid or enforceable. This aspect notwithstanding, if one considers the additional protection offered by legislation such as the CPA, it is safe to say that individuals misled by unexpected or unfair incorporated terms have proper recourse to remedies in South African law.
A single Master document may be quite extensive. However, we usually include ALL applicable laws and provisions for the broadest protection and maintain a fair and just contract. Under these circumstances, it is also advised that unexpected terms should also be reasonably explained to website users or consumers.
We always attempt to draft legal documents and agreements that are not overly technical or legalistic. If the online business portrays itself as more complex, we also discuss a form of training (even an online voice note) to explain this document to users or consumers.
Due to the sometimes bulky Master document, the other legal aspects and scenarios can not be included. These legal aspects may consist of the legal relationships between the online business and its user, or Service Agreement, and the relationship between the online business, the user and resellers or Service Level Agreement. As such, additional agreements are required to fulfill obligations between the parties and their mutual protection.
The Master document emulates the general use of the website, intellectual property rights, overview of services and functionalities, and general and commercial rules. The additional agreement (like in everyday business practices) has its agreements regulating various aspects on top of the Master document.
The above document structuring is not a new concept and is specifically created to ensure that users read the terms and conditions, breaking them into bite-size legal documents.
As stated above, we also make it more digestible to users by utilising voice recordings or video content.
We understand that you are excited about your new or existing online business and appreciate that it is a mouthful to digest. Still, rest assured we have operational and practical ways to implement these online documents quickly.
To discuss your e-commerce Terms & Conditions, we encourage you connect with Yolandi Erasmus on email yolandi@novatelegal.co.za to BOOK a Free in-person or remote 30-Minute Strategy Session.
View Yolandi Erasmus LWFH Profile HERE