What are the Legal Requirements for Starting an Online Store?
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In light of COVID-19, small businesses are required to comply with regulations which force them to close their shopfronts. For many the need to turnover inventory has meant the decision to move online has been made for them.
Out of this recent chaos opportunity arises. Selling online is a great way to engage a wide customer base across the country and beyond, while keeping costs to a minimum. However, if not done properly, you can find yourself in legal trouble. It’s important to know your legal responsibilities as an online retailer and get the right advice in the context of your particular commercial needs before setting up a website. IT Lawyers Brisbane can assist you ensure you understand your Legal Requirements for Starting an Online Store.
Our Director, Michael Barber, has over a decade experience running his own small businesses. IT Lawyers Brisbane is the third successful startup under his belt! His experience running businesses, coupled with qualifications across law, corporate governance, IT, business and accounting makes him a valuable adviser to both startups and small to medium size enterprises.
Key Legal Requirements for Starting an Online Store?
Every business is unique and has its own set of challenges. However, here are some of the common legal documents you will need to consider when you start your online store.
Website Terms and Conditions
Having the right Website Terms and Conditions is the first and one of the most crucial Legal Requirements for Starting an Online Store. This should be in place before you start trading.
Website Terms and Conditions can vary substantially depending on the type of site you are operating. However, every website should have some terms and conditions associated with it. Even basic information sites, without sales facilities, should still include a range of clauses such as those which prohibit others from infringing your intellectual property rights. More complex sites, including SaaS and e-commerce sites will need Website Terms and Conditions to be drafted to cater for your unique business needs.
Even different types of stores have different legal requirements. Importantly, if you are considering a dropshipping business see our article on dropshipping legal requirements.
Privacy is an ever-evolving field and consumers are becoming increasingly concerned about how businesses use their personal information. While there is an exception for small businesses under the Privacy Act 1998 (Cth), there are exceptions to the exception. Determining whether you are required to have a compliant policy is important as penalties for non-compliance can be significantly more than the cost of meeting the requirements in the first instance.
Central to your Legal Requirements for Starting an Online Store is determining a refund policy.
The content of a refund policy is not completely at your discretion. The minimum requirements for refunds are set out in the Australian Consumer Law (ACL). The ACL details the circumstances when you are required to provide a refund.
Section 29 of the ACL provides:
29 False or misleading representations about goods or services
(1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:
(m) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3-2).
In the 2018 case of Australian Competition and Consumer Commission v Jetstar Airways Pty Ltd  FCA 797, Jetstar was fined $1.95 million dollars for their breach. Perry J, the judge hearing the matter warned this penalty should “serve to remind other companies of the need to carefully review their websites, including online booking and sales flows and standard terms of trade.” This warning applies not just to refund policy documents but also the Website Terms and Conditions.
That said there are commercial considerations as well as legal ones. The right to return items has been a significant factor for consumers when making the decision whether or not to purchase. Particularly in fashion retail. Where a business represents there is a right to return goods because the consumer changed their mind, the business will be required to honour that promise.
Do I really need to engage a lawyer?
We recommend you engage a lawyer to draft all your terms and policies, preferably us!
Whilst considering launching your online business, you may have come across free templates and terms and conditions generators. However, these usually fall short of what is required for a business as they are not tailored to your particular product or needs. Worse still, most of them are based on American law which is often inconsistent with the ACL. The Australia Competition and Consumer Commission check websites and issue penalties where businesses terms and conditions are in breach of the regulation. As occurred in the JetStar matter described above.
Even where you think your requirements are simple, it is still important to engage a lawyer. A lawyer will be able to assess the intricacies of your legal needs to determine whether you require simple or complex policies and terms. If the work is simple, at IT Lawyers Brisbane your costs will remain low.
What can IT Lawyers Brisbane do for you?
Meeting your Legal Requirements for Starting an Online Store need not be draining on your resources.
If you are considering your own business or already running your own startup, you can rely on IT Lawyers Brisbane to be your trusted advisor. Our principal has over 20 years’ experience in the tech industry and has qualifications across all of IT, Business, Accounting, Law and Corporate Governance.
IT Lawyers Brisbane are up to date with Australian Consumer and Privacy laws, regulations and codes. With our years of experience drafting terms and policies, we can help you meet your Legal Requirements for Starting an Online Store efficiently and effectively. This leaves you to focus on the important aspects of getting your business started with the peace of mind that your legal documents have been completed professionally.
Furthermore, our IT lawyers are not only experts at drafting policies and terms, but also have a deep understanding of business processes. This allows us to provide not only legal advice but practical advice for structuring compliant business processes.
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