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How to Minimize Legal Liability In Your Online Business

2002-11-07by

Have you ever had the edifying experience of receiving an unjustified spam complaint from a complete nutter? I did, just this week. It seems to be an unfortunate fact of life for those of use who run an online business.

The whole experience got me thinking just how vulnerable those of us running online businesses are to those individuals whose sole purpose in life seems to be to attempt to destroy other people's livelihoods. Their ability to wield such power is, of course, only facilitated by the lack of natural justice that seems to apply in the online world. Where else could you be tried and convicted of a crime without even knowing your accuser or being given the opportunity to present your side of the case?

Now, there's not much you can do to protect yourself from the crazies in this world if they decide to target you. But you CAN minimize the areas of liability you are necessarily exposed to in your online (or offline) business. This article discusses a few of those areas and ways you can minimize your legal liability.

Spam

Also known as "unsolicited commercial email", spam is simply a fact of internet life. Do yourself a favor. Accept it as such and move on. Life is too short to try and move an immovable force.

Now, having said that, let me say this. DON'T SPAM ANYONE. EVER. Period. It's no way to do business, it doesn't work and it will only cause you and your business untold grief.

If you want to mass mail your offer, the only effective way is to cultivate your own opt-in mailing list or to purchase advertising to someone else's. Starting a newsletter is one way of building your own list; inviting your site visitors to leave their email address when they visit is another. Alternatively, you can buy advertising in someone else's newsletter or purchase an exclusive mailing (a newsletter publisher sends your ad to his or her subscribers in a separate mailing containing nothing but your ad).

Be VERY wary of purchasing the so-called opt-in mailing lists that you will see on offer from time to time. Fertile ground for scam artists, the modus operandi typically starts with an advertisement enticing you to send your message to 100,000 people, all of whom are just waiting with bated breath to receive your offer. All you have to do is pay the owner of the list for access to the email addresses. Because each of these 100,000 have "voluntarily" joined the list (hence the term "opt-in"), no-one can accuse you of spamming. That's the theory.

In truth, of course, there's nothing even remotely "opt in" about these lists and you will expose yourself to serious problems if you mail to many of the addresses in these lists. After all, would you make YOUR email address available to someone for the sole purpose of receiving advertising material? I doubt it. So why would 100,000 other people do it?

If you do decide to develop your own mailing list, either via your newsletter or capturing the email addresses of your site visitors, keep a record of each subscriber's subscription email or form so that, if necessary, you can prove that the person signed up for your newsletter or voluntarily provided their email address at your site so you could contact them in the future. This will go a long way to short-circuiting misguided spamming allegations.

Disclaimers

If you provide information at your site, protect yourself from the consequences of a visitor suffering some sort of damage as a result of using the information you have provided. The way to do this is with a disclaimer of liability.

A disclaimer of liability in this context makes it clear to the site visitor (or newsletter subscriber) that although the information you are making available is provided in good faith and you believe it to be correct in all respects, you accept no responsibility for any errors or omissions contained (or not, as the case may be) in the information. Further, by availing him or herself of the information you are making available, the site visitor assumes all risk associated with the use or misuse of that information.

The effect of such a disclaimer is that if you are sued for negligence, in addition to any other defences that may be open to you, you will be able to invoke the defence of assumption of risk. In other words, your site visitor assumed all risk associated with the use or misuse of the information you have provided.

In order to be effective, a disclaimer must be prominently displayed at your site so that the site visitor may reasonably be expected to have been aware of it. It will be of absolutely no effect if the existence of a disclaimer can only be discovered in the fine print way down the bottom of the page. For an example of a simple, prominently displayed disclaimer, visit the AHBBO home page at http://www.ahbbo.com and click on "Legal Notice". (In keeping with the present subject matter, if you decide to copy this wording (which you may), you assume all risk that the wording may prove to be ineffective. ;-) If you want more certainty as to the effectiveness of your disclaimer, consult your attorney.)

The same principles apply for those of you publishing newsletters.

Insurance

If available, take out public liability insurance to cover yourself against claims for negligence.

Defamation

Do not publish anywhere on the internet (or anywhere else for that matter) material that is defamatory of another person or business. The laws of defamation are not uniform throughout the world or even within countries in many cases so it is not possible to be overly specific about the do's and don'ts here. As a general guide, though, material will be defamatory if it impugns a person's character and/or reputation and is untrue. A good rule of thumb is "if in doubt, leave it out".

These are just a select few obvious ways of minimizing legal liability in your online business. It hopefully goes without saying that as a matter of course you conduct your business with the utmost integrity and ethical considerations. This is the greatest protection your business can possibly have. But sometimes, with all the best intentions, things can still go wrong. We are, after all, only human. But by continuing your good business practices and implementing some or all of the suggestions in this article, you will go a long way to protecting your livelihood from avoidable disaster.

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