Legal Basics for E-Commerce presented by Donya Vahidi
Disclaimer • This is general information only • Not to be considered “advice” • Not to be considered complete • Specific situations may differ • Consult a lawyer 2
About Boughton Law At a Glance Our Philosophy We offers full suite of legal services to the West An approach that we describe as Uniquely Coast business community: West Coast : • Over 15 practice areas covering all business • Providing direct, responsive and accessible and securities related matters legal counsel • Founded in 1949 , we have long lasting • Making complex legal matters simple relations in BC’s business, government and regulatory environment • Focusing on client’s needs to get the deal done • 48+ highly focused lawyers advising national and international clients • Charging fairly and reasonably for our services • Global reach via our international affiliates 3
COVID-19 Impacts on Small Businesses - Social/Physical Distancing - Shut down of “non-essential services” Causing small businesses in BC to suffer financially. To mitigate the impacts stemming from Covid-19, a large majority of businesses that previously had no online presence transitioned to online platforms. 4
Online Business How would you describe your “online” business? Retail or wholesale business with a web presence Goods, services offered and/or sold online Delivered online or shipped “Brochure” sites/advertising Social media/networks Etc. 5
Examples • Restaurants offering take-out, grocery, meal + wine deliveries • Fitness studios offering online/virtual classes via Social Media • Retail Stores selling their goods exclusively through their website (E-commerce) • Physio-therapists offering guiding patients virtually 6
It’s not that simple • Taking your business “online” however, is not that simple. • Business owners should be aware of the legal requirements and implications of offering goods/services online. 7
Terms of Use & Privacy Policy • The most important documents an online business must have in place prior to launching their business online: • Terms of Use (also referred to as ‘Terms of Service, Terms, or Terms and Conditions’); and • Privacy Policy 8
Terms of Use • Posted on the business website • Purpose: to govern the relationship between the business and the website user/ customer (a Contract) • Must be ‘enforceable’ • To be enforceable: – Avoid legal jargon – Website user/customer must be given notice of the Terms of Use; – Acceptance on behalf of the website user/customer 9
What should be included in Terms of Use? • Some terms include: – Payment, price terms – Customer service/customer complaints; – Refund policy; – Shipping; – Intellectual property protection; – Referencing the Privacy Policy (related to collection of personal information from website users/customers – Limitation of liability – Governing law (BC) 10
One size does NOT fit all • Must keep in mind that the Terms of Use will also include unique terms customized for the particular business/industry • For example: – Restaurants will want to contemplate food allergies and limit their liability; – Fitness studios will want to include disclaim warranties that their programs will yield results; – Health-Tech business will want to ensure their website users only receive medical advice from their physicians 11
Targeted Advertising • Ensure the website users understand if visiting your website will track their behaviour (behavioural tracking, targeted advertising) • IT/Website Developer should be involved when finalizing a Terms of Use • Also to be included in the Privacy Policy 12
Governing Law • When taking your business online, website users/customers can be anywhere in the world • If you only offer goods/services to clients in BC – this should be stated • Assuming the business is based in BC – governing law should always be BC 13
Laws that affect your Business Which law applies depends on: Type of business Location of the business Location of the customers 14
Basics of Contract Law Contract = a Offer: the web-site offers the good and/or legally services enforceable exchange of obligations Acceptance: made by clicking an icon or by the act of making a purchase Consideration: Exchange of something of value 15
Contract Law and e-Business Online Contract Law Cautions: Don’t Assume a contract on another web site will work for your site Consider jurisdiction Must be specific to your business model 16
Online Contract Issues Electronic Validity of the Contracting with the Transactions Act contract correct party! (BC) A valid contract can be made via an No need for a Acceptance is shown No need for signature physical document by clicking “electronic agent” (e.g. computer) 17
Consumer Protection Law Online Business Practices and Consumer Protection Act, 2004 (Part 4), (Division 4) Applies to transactions between individual consumers and business, for personal use by the individual Applies to all businesses, but “Distance Sales Contracts” particularly relevant to e-business Parties are not face-to-face Consumer Protection Laws protect consumers (not businesses) Not for B2B transactions 18
Consumer Protection Law Online Business must give certain information to the consumer before the sale: • Information about the seller • Consumer must receive a copy within 15 days 19
Consumer Protection Law Online Consumer must be able Consumer must be able to access contract to correct, print, or before accepting/paying cancel before accepting Best practice to e-mail Consequences of not confirmation of the complying order to the consumer 20
Consumer Protection Law Online General Consumer Protection laws also apply: • Deceptive or unfair practices • Unconscionable practices • Misleading advertising • Unsolicited goods or services • Credit provisions 21
Consumer Protection Law Online In summary: • Provide all necessary information in advance by giving contract/purchase order • Give access to all that before requiring consent click • Allow opportunity for corrections, printing • Email copy afterwards 22
Privacy Laws and Privacy Policy Become familiar with the privacy laws, particularly Personal Information and Protection Act (BC) • Information about an identifiable individual Deal with collection, • E.g. name, address, marital status, healthcare history, interests, political use or disclosure of opinions, email address, etc. “personal information” • Other than business contact information 23
Privacy Collection, You are use, responsible Consent to Duty to disclosure for keeping purpose is Obtain only respond to of PI needs PI secure, State your implied if consent of what you preventing inquiries stated, purpose! need and individual, unauthorize obvious, complaints which may d use or reasonable be accidental withdrawn disclosure 24
Privacy Appoint a Review Privacy Conduct a Measure Develop a Service Officer Contracts Privacy your Privacy (can be Audit practices Policy with Third you) Parties 25
CASL • If any business sends commercial electronic messages to its users, it must ensure that it complies with CASL • Must obtain implicit or explicit consent before sending commercial electronic messages such as emails or text messages • Penalties for non-compliance range from $1 million for individuals and $10 million for businesses • Action: develop an ant-spam policy with the assistance of legal counsel 26
Takeaways • Terms of Use drafted and tailored to your industry to protect your business • Privacy Policy to ensure that your business is in compliance with applicable Privacy Laws in Canada (and potentially other jurisdictions • Canadian Anti-Spam Legislation Policy 27
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