March 5, 2012

Supplying goods and services in an online environment?

It’s no secret that online sales of goods and services are growing, and fast. The very efficacy of certain retail models is being questioned.  There are a number of legal risks to consider before trading online.  Some are unique to e-commerce, but the bulk of normal contractual principles also apply, some of which are often overlooked by online entrepreneurs.

It is not news to any business owner that online transactions (and their resultant contracts) are as important as their paper counterparts. And while it may be easy to register a .com domain, online intellectual property rights are becoming increasingly acknowledged by our global economy.

One concern is that many online ventures are “bootstrapped” and the lack of funds can lead to avoidance of perceived non-critical costs. Suppliers of goods online still have to deal with the Competition and Consumer Act and State based fair trading laws. As with a bricks and mortar business, if you import and sell goods in Australia you are deemed to be the manufacturer. Comparably, there are implied warranties as to the quality of goods, and limited scope to reduce responsibility for defective goods.  Online service providers, especially professional services, must consider the laws of negligence, and be sure to limit the nature, scope and reliance on the services they provide.

Traditional trade mark and copyright law is now filtering through to the world’s domain name administrators (the national bodies authorised to administer top level domains) and flagrant intellectual property infringement such as cyber squatting is fast becoming a thing of the past.

Other considerations include the emergence of blogs and public online forums. These new forms of public media inevitably give rise to instances of defamation and privacy concerns with resultant claims stemming from different jurisdictions.

If your business is or is thinking about supplying goods or services online, speak to us about reviewing your terms and conditions and intellectual property to ensure that you are ready to deal with this ever changing landscape.