Most Businesses Need a Website. All Websites Need Policies.
Most companies already understand the importance of maintaining a website. At its core, a website helps people understand your brand and what you sell. A website also gives you credibility and helps consumers, employees, business partners, and others decide whether to engage with you.
Much like having a website is an important part of your business development, implementing appropriate website policies is critical to protect your business from unintended liability. Read on for guidance related to certain recommended website policies. For each of the policies detailed below, it is critical that you:
Tailor each policy to align with your company’s practices.
Within each policy, specify an effective date, explain how future policy changes will be communicated, and provide contact information for users to receive additional information concerning the policy or to raise any related concerns.
Advise and train your team about the policy to ensure compliance.
Website Terms of Use
Website Terms of Use create a contract between the website owner and each website user that governs the user’s access to and use of the website to reduce the website owner’s potential liability, protect any intellectual property accessed on or through the website, and prohibit illegal or damaging behavior by users.
Terms of Use often include sections:
Limiting a user’s reliance on information provided through the website.
Prohibiting damaging and unlawful use of the website.
Limiting the website owner’s liability.
Stipulating how any plausible litigation would be handled (e.g., specifying if arbitration would be required as well as the choice of law to be applied).
Websites often increase engagement by allowing users to upload or post content or by including other interactive features. In such instances, the website owner should determine if they could benefit from certain laws that offer protection from liability related to user-generated content, such as the Communications Decency Act (concerning defamation and other liabilities resulting from statements published by users) and the Digital Millennium Copyright Act of 1998 (concerning copyright infringement resulting from the actions of users). Additionally, the website owner should consider restricting the content that can be posted, specifying the website owner’s ability to limit or remove such content, and limiting the website owner’s liability for such content.
A fundamental issue for website owners is to ensure their Terms of Use form a valid contract by ensuring the user has actual or constructive knowledge of the Terms of Use and has agreed to the Terms of Use. These requirements are often attempted to be accomplished by one of the following methods:
Browsewrap Agreement. Making the Terms of Use available through a hyperlink on the website.
Clickwrap Agreement. Requiring users to click on a button confirming that they have read and agree to be bound by the Terms of Use before being able to navigate through the website.
There are steps that can be taken in using either method to increase the likelihood of enforceability (e.g., if using clickwrap, do not preselect a box on behalf of the user to agree to the terms; if using browsewrap, place the terms of use link in a prominent location that can be seen without scrolling). Notably, clickwrap agreements are more likely to be deemed enforceable than browsewrap agreements.
Website Privacy Policy
A Website Privacy Policy explains how your company collects, stores, uses, and discloses information from its users. A Privacy Policy should adhere to all applicable laws, including the Federal Trade Commission Act (concerning consumer privacy disclosures), the Children’s Online Privacy Protection Act (addressing privacy of children under 13 years of age), a multitude of industry-specific and state laws, and any applicable international laws. Generally, the location of a user determines which laws apply (for example, if someone from California visits your website, you should ensure your website complies with California law).
A Privacy Policy should be clearly and conspicuously displayed on the website and easy to read and understand. Additionally, it should specify the information covered by the policy and any action taken by the website owner to protect user information as well as incorporate the following information:
Notice. A description of the type of information collected as well as how the information is collected, used, and disclosed.
Choice and Consent. Options regarding how a user’s information is utilized or disclosed, which may include a requirement to obtain unambiguous consent when sensitive personal information is collected (for example, by requiring a user to check a box to confirm their understanding of the policy and agreement to be subject to its terms).
Access, Participation, and Correction. The rights of users, such as the ability to stop any sales of their personal information to third parties or to access, correct, or delete personal information collected by the website.
Next Steps
As you consider the policies described above, you may realize additional policies are needed for your website, such as a Website Terms of Sale Policy (governing the terms of online sales) or a Website Copyright Policy (related to protection against infringement claims). Because the requirements of these policies are complex and failing to properly protect your company can be costly, be sure to work with your attorney to determine how best to proceed.
This update is for informational purposes only and does not provide legal advice. Every legal situation is different and must be independently analyzed by an attorney. Please consult with an attorney for specific guidance.
ABOUT LUNA LAW, PLLC
Luna Law, PLLC, provides a wide array of legal services to small businesses, from the creation of corporate entities and contract negotiation to employment counseling, risk mitigation, and compliance with local, state, and federal regulations. Contact the firm for a consultation or visit RachelLunaLaw.com for more information.