7 Website Legal Issues Small Business Owners Should Avoid

Small business owners will sometimes fall victim to one of these eight common mistakes when building or adding to their website or brand.

In today’s digital climate, a website is a must-have for almost all small businesses.

It can be a great way to allow customers to get to know your business, build a following, and spread important information.

However, creating and maintaining a legally protected website isn’t quite as easy as it first might seem.

In fact, there are several common legal issues that small business owners should know about before they launch their website.

In this article we’ll discuss seven of these common issues so you’ll know what to watch out for.

However, it’s always a best practice to have a lawyer review your work before you run into a lawsuit.

Remember, you should always contact an attorney if you are unsure if your business and its website are fully protected.

1. Missing Disclaimers

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A screenshot of our Legal Disclaimer page, taken on August 24th, 2020.

Website disclaimers are legal notices that cover some of the key legal issues that arise from operating a website.

They are different from your terms of use or privacy policy pages in that they specifically disclaim liability to certain issues that may arise as a result of a user interacting with your website.

Importantly, disclaimers are often custom-tailored to the information provided by your business or its website.

For example, our website has a Legal Disclaimer page where we talk about how our articles may contain legal information, but users should not misconstrue this general information as legal advice.

Similarly, a personal trainer’s website may have a legal disclaimer which states “I disclaim liability should my visitors use these workouts without a spotter or proper protective equipment,” while a chef’s recipe website may contain a disclaimer saying that he isn’t responsible if someone messes up a recipe and gets food poisoning.

Or, more commonly, websites that link to other pages will disclaim liability to any information found on these third-party sites.

Regardless of how you use them, you can place disclaimers anywhere on your website.

You’ll generally find them in pop-ups, at the tops of articles, or somewhere in the website footer.

2. No Terms of Use Page

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A screenshot of our Terms of Service page, taken August 24th, 2020.

Your terms of use page is, from a legal standpoint, the most important page on your website.

A terms of use is an agreement that users must agree to and abide by in order to use your website, service, app, etc.

Generally, terms of use are split between (1) actions that users take on your website without being logged in, and (2) actions that users take after they make an account and log in.

For example, your terms of use could explain the rules surrounding your blog or explain the technology surrounding a chat-bot you use to answer user questions (“we use this program and they collect analytics data for us”).

At a bare minimum, your terms of use page should include basic information such as (1) who owns and/or manages the website, (2) how a user could get in contact with that person or business, and (3) a notice that the person or business is claiming copyright ownership over all of the intellectual property on the website.

You should also detail your security measures, data collection policies, and other assorted ways that your website “works” with user data.

Finally, and most importantly, make sure there is a link to this page on every page of your website. The easiest way to do this is to place it in the footer.

3. Actions that Breach a User’s Privacy

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A screenshot of our Privacy Policy page, taken August 24th, 2020.

Discussions in the media and among politicians have increasingly focused on how businesses collect and use consumer data.

For this reason, a privacy policy is a crucial part of any business’s website.

In its simplest version, a privacy policy explains to the visitor what information your website collects, how it collects it, and how your website will store this data.

Generally, if you are going to use cookies or track any information such as an IP address, you need to have the consent of the user.

Once you do start collecting data, you should also make sure it is secure.

Many businesses encrypt the information they collect.

Users must also be allowed to easily contact someone in your business and have their information removed, or “forgotten.”

In general, these guidelines vary greatly between businesses and websites. The more complex your website is, the more advanced your privacy policy will be.

This is especially true if your website contains an e-commerce aspect.

Finally, you should also be aware of industry specific restrictions such as HIPAA or the Rules of Professional Conduct used by attorneys.

Always check with other professionals in your field to make sure you’re following industry best practices.

4. Unintentional Copyright Infringement

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Screenshot of our footer with our copyright notice in a red box, taken August 24th, 2020.

Business owners will sometimes unknowingly infringe on someone else’s copyright when compiling their websites.

As you source pictures, text, and video for your website, make sure to never assume this content is part of the public domain.

Using copyrightable content as your own will leave you vulnerable to infringement lawsuits, so it’s wise to double check that all of your marketing assets are truly original before you use them on your website.

Often, it may be simpler to use content in the public domain, or to contact the owners of the copyrightable content to ask for express permission.

Note as well that being cautious of copyrights goes both ways.

You should always take steps to protect your own intellectual property from copyright infringement.

Basic steps such as adding a copyright notice to the bottom of your page or adding sourcing information to any images you use can help strengthen your case should someone choose to steal your work.

5. Unintentional Trademark Infringement

Designing a Trademark

Ranging from logos to domain names, unintentional trademark infringement is actually rather common for new businesses.

Under U.S. trademark law, you may be infringing on another person’s trademark if your domain name is “confusingly similar” to another business’s, provided they operate in the same general industry as you.

For example, Delta Airlines (delta.com) and Delta Faucets (deltafaucet.com) may share a similar name, but their domain names and industries set them apart.

After all, no reasonable person would expect to buy a faucet from the Delta Airlines website.

However, if another aviation business chose to register the domain name deltaairlines.com, they would likely be infringing on Delta Airlines’ trademark.

This is especially important for entrepreneurs who choose to create a website before they fully settle the business formation side of things.

Since such business owners are developing their website alongside their business, they will sometimes accidentally use someone else’s name, logo, or trademark as their own, either by failing to perform a full trademark search or by using logo templates or other online tools to generate their content.

In general, it’s wise to double check for confusingly similar brands before you buy a domain, design a logo, or choose a specific name for your brand.

6. Online Defamation

Man working on his business at home

Defamation, in its simplest terms, is a statement that injures a third party’s reputation in a way that incurs damages.

For example, if a newspaper publishes a poorly researched, false article about a local businessman, and that businessman loses revenue as a result of this article, the businessman could sue the newspaper for defamation.

In the contexts of your website, you should always research any content you add to your website to confirm its validity, especially if you’re writing about other people or businesses.

If you make claims about another business that hurts their reputation, and potentially their income, you could be sued for damages.

As another, related topic, it’s not uncommon for business owners to come into legal trouble for sharing customer information without permission.

This commonly occurs when businesses post customer testimonials that include identifiable information about a customer without that customer’s approval.

Remember as well that defamation is not limited to only what you post on your website.

The same rules apply to what others post on your website as well.

For example, if you allow users to comment on your website, you could be held liable for the content they post on your website.

As such, you should make sure your terms and conditions specifically prohibit the use of defamatory language.

Similarly, you should take proactive steps to distance the words of your users from your own.

7. Poor Internal Organization

Business Organization Concept

Problems on your website are one thing, but poor organization in the real world is another beast entirely.

As previously mentioned, it’s smart to have a plan in place in case you experience a security breach.

Importantly, this plan should detail a clear division of labor between the various stakeholders in your business.

For example, who’s in charge of implementing data encryption best practices and other forms of daily maintenance? Who’s in charge of dealing with a data breach should one occur?

After all, your policies mean nothing if you fail to properly execute them.

As you form your privacy and security policies, you should make sure to detail the exact organizational structure that will handle the work.

From your IT manager to the person in charge of auditing your current website security, it’s critical that you lay out an exact plan for who will be in charge of the various aspects of your site.

Finally, and as an extension of the previous point, you should make sure to standardize your web presence to ensure a consistent presentation of your brand.

Your website should not have information that contradicts your social media platforms. Your contact information should be consistent on all platforms.

If your digital presence is inconsistent and uncoordinated then you may miss requests to license your copyrighted material or reply multiple times to a negative review.

This can make your business look sloppy and even land you in legal trouble.

For this reason, it’s wise to have a single working document that lists all of your business’s marketing and branding standards so everyone who posts on behalf of your brand knows what to say and how to say it.

Conclusion

Managing a website can really help a business blossom. However, simple mistakes and oversights can cause more harm than good.

The more complex your website is, the more likely it is that you have legal vulnerabilities.

However, careful review and organization can help your website be as productive and protected as possible.

Of course, if you ever have concerns or doubts, an attorney can quickly resolve them. Always contact one when in doubt, whether for your website or your business as a whole.

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