WHY YOU SHOULD HAVE TERMS AND CONDITIONS AND A PRIVACY POLICY FOR YOUR WEBSITE

By James Forrest

In a recent Forrest Firm Blog post, we discussed the need for businesses to respect intellectual property rights and terms of use with regard to digital images used for online marketing efforts. The online world is fraught with risk, and we would like to turn your attention to another aspect of online marketing—managing your risk with regard to how people may use your website.  One of our core areas of focus is ensuring that any Forrest Firm client is in a favorable position as it relates to third parties in the marketplace, which can include contractors, employees, vendors.  An often overlooked area is people that may go to your website.

Two items are fairly standard and are used to protect you from folks that may access your website online: Terms and Conditions, and a Privacy Policy.

Let’s start with Terms and Conditions.  While never legally required, having a page on your site outlining its terms and conditions of use is almost always a great idea. It’s your site, after all, so you want to establish the rules of site engagement, rather than having a court do so.  Terms and conditions pages are especially important when you are transacting business of any kind directly from the site.  These pages can limit your liability, as well as protect your rights to the content contained throughout your website.  Most importantly, these pages serve as a guide for users on how to properly use the site, and they also appropriately manage expectations of those users with regard to the site’s performance.

While there are no specific requirements for your site’s terms and conditions, you should work with counsel to tailor them to the specific business needs of your company and the industry in which it performs, as well as what you intend to do with people as they visit your site, whether it’s transacting business or simply marketing to them as they visit. Next, let’s take a look at the Privacy Policy.  Nearly all of us find ourselves constantly exposed to privacy policies, as most of us have some type of bank account, and, unfortunately, we all get sick from time to time. The financial and healthcare industries are both heavily-regulated and among those where businesses are required to post and disseminate privacy policies that adhere to strict guidelines.

Privacy policies can protect your business in one of the areas most sensitive to liability concerns—the collection of user data. Now, more than ever, even those companies that don’t sell services or products directly from their sites are still gathering user data, so that they can keep marketing to their prospects and eventually create sales.  Thus, for many businesses, user data has become a type of currency, and a currency of very high value as it creates a virtual pipeline to drive future sales.

With the rise of internet use and social media sites, in particular, people are freely giving up their personal data.  This doesn’t mean, however, that they aren’t sensitive to its proper use. Taking these concerns into consideration, your privacy policy should clearly address your purposes for gathering private data, as well as how you collect it, use it, and store it.  The idea here, as with the terms and conditions page, is that you make your customers and prospects comfortable with the expectations you set.

You should display links to your terms and conditions pages, as well as your site’s privacy policy, in places that are easy to find for site users.  Your terms and conditions should reference your privacy policy, with a hyperlink embedded for easy user navigation.  Another best practice, particularly among e-commerce providers, is to present users with the site’s terms and conditions during a transaction, asking them to click “I agree” to acknowledge that you’ve presented them with the site’s rules of engagement.

Ultimately, working with your business attorney to craft appropriate privacy policies, as well as terms and conditions for your website, accomplishes a two-fold mission:  managing your risk in the online marketplace and, just as important, assisting your prospective customers in doing business with you.