Pitfalls to avoid when selling via website – Business Daily
QUESTION: Dear Cathy, I plan to import various beauty products from Turkey and sell them through a website. I am careful to observe the law therefore are there any tips you can give me?
Dear Regina, I am glad you raised the question because believe it or not there are a lot of legal issues to consider when setting up an online shop.
First things first. To avoid premium tears, get a suitable contract with the web developer to govern key issues such as ownership of the website, domain, and content. I know some people who have been locked out of their websites when the developer refused to give them the password.
The second is choosing the domain name. Care must be taken that the domain name does not infringe on another’s trademark. The last thing you want for your business is to get into a legal dispute over domain names.
These disputes have increasingly become common and the World Intellectual Property Organisation indicates that it has handled about 57,000 domain name disputes.
Avoid the temptation to choose a domain name that seems similar to a well-established brand to direct traffic to your website. This act is known as cybersquatting and can land you in trouble with a well-known brand.
Having chosen your domain name, the next thing to consider is strategy issues. What type of website do you want? Is it a purely informational one? Is it a transactional one? You need to know your processes before you even design the website. Is there any process that will be web-based? How does this process interlink to other processes?
For example, if an order is made via the website then how do you communicate that order to the guys at delivery? If your customer makes online payments, how will receipts be issued? What I am simply driving at is that you need to have drafted your strategy and processes even before designing.
Transactional websites require more detailed professional advice in the area of cyber security especially if payments shall be made through the website. The Sale Of Goods Act and Consumer Protection Act will apply to any transactions that occur through the website.
Therefore, ensure that the e-commerce processes comply with the law. For example, once a client makes an order and a payment then a legally binding contract is deemed to have taken place and you will be obliged to deliver. This is why it is crucial to have your processes legally compliant.
The legal issue in the above stage is to ensure your website contains legally binding policies and documents. Please do not download some terms and conditions for you from another website! You need to have bespoke and tailor-made policies, terms, and conditions that suit your business.
As simple as it sounds, in the event of a dispute with your customer, the terms and conditions are what the court will consider when making a ruling. It is a contract, make sure it is valid.
Content is important but equally important is to have content that does not infringe on another business’s content. Three years ago I acted for a company that won a website plagiarism case. The defendant had copied the plaintiff’s website word for word to the extent of copying diagrams our client had designed.
Critical success factors for your website include design and marketing. For this, you will need to speak to a web developer and a digital marketer to position your website and direct traffic to you.
Ms Mputhia is the founder of C Mputhia Advocates. She is a partner at Sinapis Entrepreneurship Programme and the legal director with SMEThinkTank