15 APRIL 2020 • 10 MIN READ
An e-Commerce business predominantly involves the use of a website on which products and/or services are sold. These products might be physical products delivered through couriers or might be digital products delivered by means of email or a downloadable link (such as Hello Contract).
In setting up and running an e-Commerce website, you, as the website owner, need to set expectations and binding rules between yourself and your customers. These rules are predominantly set up in three separate legal documents which should be viewable on your e-Commerce website and to which each customer needs to agree.
This article will aim to educate you on the function of each document, as well as the important decisions that you need to make, which pertain to your e-Commerce website, in order to correctly compile these documents without the help of lawyers.
Head directly to our shop for the three documents you need:
An e-Commerce Website Terms of Service is the main governing document of your website, and sets out the overarching and binding obligations as between the e-Commerce website owner and its customers.
An e-Commerce website terms of service should at the very least have clauses in it which pertain to the following:
One of the most essential aspects of an e-Commerce Website Terms of Service is specifying the manner of how goods are delivered to a customer and the timeframe in which you intend to deliver those goods. For example, should you specify that a delivery might take up to 14 working days, and the customer begins to complain that they have not received the goods after day 5, you may refer them to your e-Commerce Website Terms of Service in order to show that you are only obliged and will have the goods delivered within 14 calendar days of the goods being ordered.
This clause is also important in instances when you use external couriers, so that you are able to indemnify yourself against late delivery by an external courier, as you do not have control over the exact date and time frame in which they might deliver.
Additionally, this clause is necessary from the perspective of determining when risk associated with the goods transfers from you to the customer. It is ideal to record that upon delivery to the customer, whether the customer is at the premises for delivery or not, the risk associated with the goods and their being stolen or damaged, for example, transfers immediately on delivery to the customer.
It is important to record exactly what payment methods you allow on your e-Commerce website in order to ensure that customers do not try to negotiate alternative payment methods which might be risky or simply not accepted by you. Furthermore, if you accept payment by credit card and the name of the payment processor is mentioned, it should be recorded that the customer acknowledges that it is subject to the terms and conditions of the payment processor rather than just being subject to your own terms and conditions.
The customer needs to warrant that any information that they provide to you is accurate and true, that they are not impersonating any other person, not violating any laws in making the purchase, such as a person being over the age of 18 should you operate an e-Commerce website which deals in liquor deliveries, for example.
Users should undertake that they will not post anything to your website which is objectionable or is unlawful, spam the website, make use of unsolicited mass emailing techniques, introduce a virus, worm, Trojan horse or malicious code, redistribute or use your information for commercial purposes and the like.
It is very important that you record that a customer is required to use your e-Commerce website at their own risk. Further, that you will not be liable for any use or conduct in the connection with their use of the website at all.
It should be recorded that the contents of the website are the subject of your copyright. A copyright is essentially a protection that is afforded to a piece of creative work. This might include pictures, logos, the general look and feel of the website, audio files and the like. Generally, copyrights do not need to be registered and are created automatically.
As such, the images on your website, unless they are from third party manufacturers and suppliers are the subject of copyright protection, and should be recorded as such.
One should also record a general prohibition that users cannot take your website and simply reverse engineer it for their own purposes in an attempt to copy your website based on the source code thereof, which comprises your intellectual property.
Clear terms, setting out what the procedure should the customer or yourselves not adhere to their respective obligations in terms of the e-Commerce Website Terms of Service should be recorded. These are what are known as breach provisions.
Normally, a breach provision will provide that should either party commit a breach of the agreement, such as the customer not making payment of the goods despite having ordered them, or your failing to deliver the product to the customer, the innocent party will be entitled to place the other party in breach, and require that the other party rectify the breach by either making payment of the goods (in the case of the customer breaching) or delivering the goods (in the case of you failing to deliver the product). Thereafter, and should the breach continue, the innocent party will either be entitled to cancel the transaction and/or claim damages through a court of law.
Related to the above, in the event that there is a dispute between yourself and your customer, a procedure to resolve any dispute should be set out.
Normally, this dispute resolution procedure will involve the parties having to try and attempt to settle the dispute for a certain period of time informally between themselves, and if this fails we would suggest attempting mediation with a qualified mediator for a further period of time, and thereafter, should that fail, either looking at permitting the parties to take it to court, or otherwise, arbitration.
Any e-Commerce Website Returns Policy sets out the circumstances in which goods which are purchased from your e-commerce website may be returned by the customer who purchased them.
An e-Commerce Website Returns Policy should at the very least have the following terms contained in it:
It is very important to record when returns will be permitted. For example, this might include that the incorrect product was delivered to the client, the client no longer wants the product, or that a product which is of the incorrect size or specifications was delivered to the customer.
The timeframe for a return should also be recorded. This will prevent customers from using the product for a significant period of time prior to their return. For example, you might impose a 14 day window from the date of purchase in which a customer is required to initiate a return through your website.
Once a product has been returned, your website might allow for one or more of the following, which needs to be recorded:
It should clearly be recorded what the procedure is to return a product. This might include, for example, that an email is sent to a specific email address or that there is a page on your website with a form devoted specifically to returns.
Furthermore, it should set out the contents of what might need to be included in the return request. For example, this might include the reason for the return, the choice as to what they would like to occur upon the return, such as their account being credited, and the like.
It is very important to stipulate the circumstances in which you will permit a product to be returned. For example, this might include that the product needs to be undamaged, unused and in original packaging. It goes without saying that products which have been extensively used should not be permitted to be returned to you.
Should you have the ability to collect the product to be returned from the client, it should be mentioned that the customer has the choice of the product being collected from them or that they may deliver the product to you for the return.
We suggest that it is very important to include a clause in your e-Commerce website terms of service that permits you to inspect the product which is being returned prior to you validating its return.
Further to the above, it also might include the fact that you might in future market to the customer of certain of your other products and/or services.
It needs to be recorded the categories and types of persons and/or entities to which any personal information is shared with.
For example, and in the circumstances of an e-Commerce website, you would need to share address information with any couriers which will deliver the products. In addition, payment information will be shared with the necessary payment processors of your website.
All of these are available at the following links:
Whilst most start-ups try to take a shortcut in compiling their Website Terms of Service by simply copying and pasting some industry leader’s terms and conditions on their own website, this is fraught with dangers.
03 MARCH 2020 • 4 MIN READ
Every business needs professional legal contracts. But, most businesses are forced to go without. Hello Contract aims to change this and make high-quality legal documents accessible to all South Africans.