Insurance · 10 July 2017

Writing the terms of use and privacy policy for a small online business

Cropped shot of a businessman using a digital tablet at night in an office
If someone copies part of your website or its content without permission, terms of use can help you sue them for breach of contract

Here, Grid Law founder David Walker guides readers through writing the website terms of use and privacy policy for a small business, and explains why they can provide a company with crucial protection.

The terms of use and privacy policy are two of the most important pages on a website, yet they are probably the least read.

When I advise a client that they should have them, and then offer to prepare them, their first reaction is often: “No, don’t worry, I’ll just copy them off someone else’s website

Putting aside the fact that this would make them guilty of copyright infringement, this is a terrible idea and in this article, I’m going to explain why.

They help you comply with the law

According to Google boss, Eric Schmidt, the UK is a world leader in ecommerce. This can, at least in part, be put down to the trust we have in the online traders we do business with.

This trust comes from the laws that help protect our personal and financial details whenever we share them whilst shopping online.

For example, if you use a web form, to collect names and email addresses of people you wish to market to, you’re collecting personal data. There are rules about what you can and cannot do with this data and they’re set out in the Data Protection Act 1998.

The best way to ensure you comply with these rules is to have a privacy policy on your website. If you don’t, and you use the data in contravention to the Act, you risk being sued by the people who have given you their details, or fined by the Information Commissioner.

However, many of my clients don’t take this risk seriously. They think it will never happen to them. Whilst the risk of being sued may be small, if they don’t comply with their legal obligations they face a much greater risk with far more serious consequences.

If they don’t comply, there’s a very real risk that their Facebook or Google accounts will be shut down, or they could be blacklisted by their CRM provider for failing to comply with their terms of service.

If this happens, they can no longer advertise or send out broadcast emails. As you can imagine, this would be disastrous for their business. When I point this out to my clients, they suddenly sit up and take notice.

Even when you do have terms of use and a privacy policy on your website, you need to keep them up to date. New laws are always being passed and older laws updated to reflect the ever-changing online landscape.

They protect you from being sued

Many business owners have a blog on their website through which they provide advice to potential clients. Obviously, this advice can’t be specific to an individual and it’s unlikely to be as comprehensive as the advice you would give face to face in a meeting.

The advice can also become out of date or it might only be relevant to a particular audience or location (for example everything I write about is based on English law).

If someone takes your advice, acts on it and it was wrong, they may try to sue you for any losses they incur.

You can prevent this by adding a disclaimer to your website terms of use. Something along the lines of:

“The content on our site is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.

Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up-to-date.”

This is usually combined with a limitation of liability clause so if someone does try to sue you, the amount they can claim is limited to an amount you specify.

They protect your intellectual property rights

Your website is full of intellectual property, making it one of your most valuable assets.

Therefore, you must protect it and if you don’t, you risk losing it.

You can protect individual elements of your website in different ways. For example, your brand will be protected by trade marks (registered or unregistered), the content you have written will be protected by copyright and the whole website may be protected as a database right.

Your terms of use can add another layer of protection. If someone copies all or part of your website or its content without your permission, you can sue them for breach of contract.

Also, there is a little-known fact about taking legal action for copyright infringement. If you don’t have a clear copyright notice on your website, you’re unlikely to be able to claim any compensation from the person who did the copying. The best you will do is get a court order preventing them from copying you again.

If you add a copyright notice to your website terms of use, making it clear that you own the copyright in all of the materials on your website, you can claim compensation if it is copied.

They enable you to control visitors to your website

When you have terms of use on your website, you form a contract with anyone who visits your website. By viewing your website, they agree to the terms set by you so you control what they can and cannot do.

For example, if you allow visitor to upload their own content or to comment on your blog, you need to have an acceptable use policy as part of your terms of use. This will allow you to moderate the comments posted. If anyone posts anything inappropriate they will be in breach of contract and you can then block them from posting anything further.

If there’s a members only area you can set the rules about who can join and you can prevent unauthorised sharing of login information. If they don’t comply, they’re once again in breach of contract and you can revoke their access, even if they’ve paid to be a member.

As you can see, a website terms of use and privacy policy should be personal to you and your business. It doesn’t make sense to copy someone else’s and rely on a complete stranger to ensure you comply with the law, prevent you from being sued and protect your most valuable assets.

As our digital economy grows, laws will continue to evolve to ensure that it’s a safe place to do business. If you want to be a part of this economy, you must comply with them and having professionally drafted terms of use and privacy policy is the best way to ensure this.

If you have any questions about complying with your legal obligations in the online world, please feel free to email me at editors@businessadvice.co.uk and I’ll be happy to help.

Take a look back at some of our other favourite David Walker articles:

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ABOUT THE EXPERT

David Walker is the founder of Grid Law, a firm which first targeted the motorsport industry – advising on sponsorship deals, new contracts and building of personal brands. He has now expanded his remit to include entrepreneurs, aiding with contract law, dispute resolution and protecting and defending intellectual property rights.

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