E-Retailer: E-commerce Best Practices
BY FRED MENDELSOHN, PARTNER at BURKE, WARREN, MACKAY &
Most distributors have a sophisticated internet presence; and many, if not most, do business (i.e., sales transac- tions) on the internet. Doing business on the internet
has inherent risks, many of which can be substantially minimized
by establishing clear contract rights with prospective and actual
purchasers. So called “e-tailers” can also protect their e-commerce
activities by well crafted privacy policies, terms, and conditions
of sale (e.g., shipping and refund policies, etc.), and legal notices. This article identifies some of the best practices, derived from
the ever-evolving law of e-commerce, to limit risk, exposure, and
litigation for the operators of e-commerce sites, particularly if the
site is one where customers can purchase products (and/or services).
What Is the Big Deal?
While e-commerce law is still evolving, doing actual business on the web generally subjects all businesses to jurisdiction in all 50 states (unless limited by the terms and
conditions of use of the e-commerce site). While many
distributors are already doing business nationwide, their
internet presence only further secures the risk of claims
brought in other jurisdictions. To boot, all of the laws
that apply to old-fashioned “paper” transactions apply to
e-commerce transactions — for example, the Uniform Commercial Code as to the sale of goods applies to transactions
on the internet. Thus, e-retailers should ensure that their
websites are state-of-the-art from a legal perspective. Such
protections can run from warranty and damage disclaimers
to use of third party sites accessible through the e-tailers
site to choice of law, forum, and the arbitration provisions
or jury waivers.
How Important are Terms and Conditions of Use?
Critical, is the answer. While many businesses place import-
ant disclaimers, such as disclaiming implied warranties and
claims for consequential or special damages in their terms
and conditions of sale, prudence dictates that they be cov-
ered in the terms and conditions applicable to the website
as a whole. In fact, “visitors” (i.e., potential customers)
should not, in theory, be able to gain access to or rights to
use a website (or its constituent parts) without first accept-
ing the terms and conditions of use of the website. Even if
a distributor has its website outfitted such that visitors have
on the site, this is only the beginning of what best practices
• No visitor should have the choice of accepting the terms
of use without actually seeing, or being able to view, such
terms, which should be automatically visible or quickly ac-
cessible by clicking on a clear and easily found hyperlink.
and in a way that the customer is required to navigate past
transaction at hand.
• “Web masters” should ensure that visitors have a sufficient opportunity to review the terms and conditions of use
before finalizing their online transaction, at the reader’s
every page, so that visitors can review the terms at later
points in their use of the site.
forth in legible font, and in accordance with any applicable
The Import of a “Meeting of the Minds”
Without over-complicating traditional legal principles, a
contract can be said to exist when there is a meeting of the
minds between contracting parties as to essential and/or
material terms. Securing a meeting of the minds is equally
important in cyberspace but is detached from the way in
which old-fashioned contracts have been formed — even
the classic purchase order and acceptance forms used in traditional product purchases. Best practices for e-commerce
sites suggest that:
• Visitors should have a recognizable choice between
finalizing a business transaction. By giving a customer this
choice, she either becomes a customer or she rejects being a
customer if she declines.
• Word of acceptance or declination should be clear and
unambiguous. “Web masters” should not use phrases such