Maybe you are dreaming of starting an online business, or maybe you have already started one. Either way, you need to put some simple legal protections in place to keep your business safe. It goes without saying that you should give some serious thought to incorporating your online business, and protecting your intellectual property with trademarks certainly doesn't hurt.
But what about contracts? Who needs those anyway?
Simply put – you do if you are in business. And if you are operating a business online, some contracts are required by law in many states.
Here's a list of 6 contracts you must have for your online business:
#1 Privacy Policy. Did you know that a privacy policy is required by law in many states? And since you are doing business online, if you collect information from people who visit your website then you must have a privacy policy in place. A privacy policy tells visitors to your website how you are collecting their information and what you are doing with that information. It's a consumer protection measure that you absolutely, positively must have on your website.
#2 Terms and Conditions. The terms and conditions is essentially a contract between your business and visitors to your website. While not mandated by law, it is highly recommended. A well-written terms and conditions contract can protect your from lawsuits, limit damages, dictate where people can sue you, and provide for various methods of alternative dispute resolution (such as arbitration). Every visitor to your website is presumed to have read and agree to your term and conditions contract.
#3 Legal Disclaimers. If you are giving any type of advice on your website, you need a legal disclaimer. This is especially true if you are telling people how to make money, build a business, or giving professional advice. The disclaimer should say something to the effect of “the information provided on this website is for informational purposes only and is not deemed actual advice…” You want to make sure that people know that they shouldn't rely on your website for advice – they need to seek out professional help when a professional is required.
#4 Terms of Use for an Online Course. If you are running a business online, chances are that you may decide one day to launch an online course. This is a great way for many entrepreneurs to get a start online. But if you decide to do this, you need to have a separate contract, called a “Terms of Use” document, that is specific for your online course. This is different from the terms and conditions referenced above. A terms of use document will outline the terms of your course, what is included, the refund period, payment terms, instruct the participant that you are not providing professional advice, limit liability, etc. Again, these can be as detailed or as bland as you want them to be, but I would certainly recommend having a lawyer look it over for you (or perhaps even draft one for you).
#5 A Client Contract. Another way that many online businesses get their start is to take on consulting clients. And if you decide that this is the right avenue for you, you absolutely must have an agreement in writing with your client. This agreement will spell out the work you will do for them, deadlines, and payment terms. It will also spell out where and how any disputes would be handled, and detail who owns the intellectual property you may prepare for the client. If you don't have a written contract in place, you are asking for trouble.
#6 An Independent Contractor Agreement. It is not absolutely necessary to have an independent contractor agreement when you are just starting out, but as you grow and start to assemble a team around you, it is a definite must have in your legal arsenal. Similar to a client contract, but in this case the contract is written in a way to protect you as the person hiring the contractor. This agreement will spell out that the person working for you is an independent contractor, not an employee, and will address such issues as the ownership of intellectual property, non-disclosure of private information, compensation terms, and potentially even non-compete provisions (although non-competes will vary by jurisdiction).
I realize that this seems complicated, but once you have these contracts in place you are good to go. These will handle 80% of the issues that come up in your business.
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