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PERDOMO KLUKOSKY & ASSOCIATES
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eCommerce Contracts

Protect Your Company and Online Commercial Activities

For the most part, online business contracts and contracts for eCommerce are the same. These are all legally-binding instruments that exist to protect all parties involved when conducting business. The main difference between an online  contract and a contract executed in a more traditional setting is the manner in which the online contract is delivered.

  • For the most part, online business contracts and contracts for eCommerce are the same.

  • Every company should be concerned about contracts between their site visitors, customers, and business partners.

  • Consult NYC eCommerce Laywers, Perdomo Klukosky and Associates, for questions regarding all your business contracts. 

Online contracts and the name clearly indicates are written on a website and is presented to a consumer or business partner which must then read the content, check a box stating that they understand the contents and then type their name at the bottom, in most instances.

The law in this area has evolved significantly as to considered these contracts valid for purpose of enforcement before a competent court. However, it is important to seek the advise of an attorney to ensure that all necessary steps are considered to make the agreement legally binding on all parties per the applicable laws.

Clickwrap or Click-through Agreements

Of the different eCommerce agreements, the most common is the clickwrap, commonly known as the clickthrough agreement. Every business needs to govern their relationship with the visitors on their website and this is the method that most businesses use. If a contract is drafted improperly, it can leave a business exposed to a variety of liabilities and the contract may not be enough to shield the business from liability arising from potential lawsuits.

The clickwrap agreement is an online agreement that has been created because of new technology and the Internet. Often, it requires users to check a box or do something else to clearly indicate the visitor's intention to agree on the terms and conditions presented prior to allowing the individual to continue to navigate on the website.  This is based upon the "shrinkwrap" method of disclosure that is used traditionally. If an item is shrink-wrapped, the buyer sees a warning that says upon tearing the shrinkwrap, the user commits to the terms enclosed.

All of the clickwrap agreements allow a user to read the agreement prior to expressing consent to its terms and conditions. Some websites are set up to ensure a user has no choice but to read the agreement first while others use the agreement elsewhere on the site.

In some cases, there is fine print located on the bottom of the website with a "terms of use." This tells a user what can be expected by conducting business on the website, including how they can use the information on the website, how their information will be kept secure [privacy issues] and other important provisions.

Various other eCommerce Agreements

A variety of other eCommerce agreements need to be considered on an as-needed basis. When conducting one's self online, there are a variety of other concerns that need to be addressed.

The domain name that a business chooses can lead to legal problems. This is because of the use of domain names and trademark law. 

Developer contracts also need to be considered. When it comes to launching an eCommerce site, developers may try to copy another site or hold back on the "go live" date. Having definitive contracts in place can ensure that a business is launching their site in a timely manner.

Intellectual property development and compliance is extremely important with eCommerce because oftentimes website developers copy content from other websites which have proprietary value. Therefore, legal compliance on this issue is crucial.  It is important to make the necessary disclosures and advise third party contractors that the company will not tolerate the use of proprietary content belonging to third parties.  Therefore, companies must voice their no copyright infringement policy on their agreements with website developers and related contractors.    

It is important to secure work for hire agreements to govern the relationship between the company and any of its contractors to ensure the content they present to the company is original and that the ownership of said original content is transferred to the company as a result of the services provided by the contractor. Obtaining permission (performing the proper clearance) for the use of content placed on the website is also an integral part of any business that operates online and must be performed by the company's attorney

Hosting an eCommerce site leaves another avenue to be explored for contracts. Response times, hacking security and uptimes should all be considered in the contract with the third-party hosting company. All issues should be discussed thoroughly within the confines of the contract to offer sufficient protection to the business.

Furthermore, the privacy of customers (including potential customers) must be protected at all times.  Confidentiality clauses must be placed within the clickwrap agreement or elsewhere on the site. When it comes to partnering arrangements with third party providers, privacy concerns need to be addressed vis-à-vis the manner in which third parties obtain information and what needs to be presented to the visitors and customers using the website.

In many ways, eCommerce contracts are very similar to regular business contracts. It tells a business partner or customer what they need to know prior to proceeding with the business deal. However, when business is conducted online, the importance of proper contract drafting is much more evident because their primary reason for existing is creating a shield to protect the company from legal action based on its online practices. 

The law is in constant evolution regarding online transactions and, as thus, claims arising from the use and abuse of online commerce are much more common than ever.  Therefore, companies have to be much more vigilant of their online practices and ensure they seek the advise of experience legal counsel to navigate their online business at a smooth and successful pace.

In sum, companies that are constantly doing business online should seek the advise of an attorney that understands the online business and is familiar with the legal trends in this area. This includes but is not limited to, contracts regarding the terms and conditions of use, customer privacy issues, third parties providers and others.  There is an imminent need for multiple contracts and agreements in order to provide sufficient coverage and protection to the business.

Every company that is looking to exploit their business model online must explore what are their particular needs regarding eCommerce. Obtaining the effective assistance of an attorney in this area is of outmost importance. Effective legal compliance will ensure that the business is adequately protected from potential lawsuits, which tend to impair business growth, credibility, financial hardship and ultimately bankruptcy.

Why You Should Have eCommerce Contracts

According to Francelina Perdomo, our Managing Partner, electronic commerce ["eCommerce"] contracts are becoming an integral part of doing business on the Internet. eCommerce is growing rapidly and with it are also legal concerns that need to be addressed when forming business relationships and closing on transactions online.  eCommerce law has had a steadfast development in recent years.

Legal considerations regarding interstate commerce, choice of law, and forum and arbitration are important considerations that every online business must take into account. These legal considerations are important in all commercial business setting but much more significant in online business. Every company conducting business online should be concerned about contracts and agreements between their site visitors, customers, business partners and even third parties.

When you are setting up an eCommerce business, contact us at 212-274-1261 to review and discuss your online contracts and agreements.

Online Business Contracts

NYC Lawyers Who Focus on All Commercial Contracts

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Perdomo Klukosky and Associates
11 Broadway Suite 615
NYC, New York 10004
Phone: (212) 2741261