Seven key legal issues in the e-commerce

No matter whether enlarges the existing e–commerce or starts a band new business in internet, the online entrepreneur must have a panoramic perspective over the legal framework and detailed look over the traditional and specific legal issues of internet law. The creation of a website is neither the beginning nor the end of the chain of questions for consideration and resolving. The website is only the shop window of the business.

This article does not describe comprehensively all legal aspects of the online business. The idea is to mark the main questions upon startup and organization of the e–commerce.

1. Domain name
The choice of domain name in the e–commerce is difficult process requiring assessment of many factors. Except the considerations for association a domain with the name of a brand and the meaning of the domain in the process of the website optimization, there are also legal aspects whose neglecting or ignorance can have serious consequences in the future.

The chosen name must not be similar or like to the name of registered trademarks, especially of well-known trademarks. Registering a domain that is close or similar to the name brand is considered an offense known as “cybersquating”. In the Internet there are different databases, where domains can be checked for a similarity with registered trademarks. On the website of the World Intellectual Property Organization can be found a public database facilitating searching into registered trademarks

2. Website
The well optimized and functional website with friendly user interface plays a key role for the success of the e–commerce. The contract for its creation should cover a wide range of legal issues. Firstly, the contract or the enclosed Terms of reference should set out clearly, in details, the company’s requirements regarding the website – functional and performance requirements and in terms of whole visible content ( video, images, music or text referred as components of design). Other important issues in the contract are clauses for tests and warranty period for debugging, assigning rights and responsibility for the actions of subcontractors (if any) provisions for disclosure of confidential information made known to the contractor in connection with the creation of the website, clauses for warranties and liability for failure, and others depending on the specifics of the contract.

3. Rights of Intellectual Property
By creating an e-commerce website emerged a new object of intellectual property and all copyrights and related rights with regard to their use in the website must be clearly stipulated in the contract. The owner of the website should receive right to use the website without restriction in time and scope, to make changes in it, the right to update and improve website without limitations, depending of the changing business needs and conditions. Last but not least, the contract must provide warranty by the contractor that with the creation of the website no copyrights and other rights of the intellectual property of third parties are violated.

4. Terms and conditions, required information
E-commerce site must contain certain information that is expressly referred to the Law on Consumer Protection. These duties include providing information to the user regarding the name and the address of the provider, the general characteristics of the commodities/services, the price of the commodities/services, including all taxes and fees, the cost of postal or transport charges, which are not included in the price of the commodities/services, related to their delivery, the cost of using a mean of communication from distance, when it is calculated in a way, different from the one indicated in the general tariff, the way of payment, delivery and implementation of the contract, the right of the customer to withdraw from the contract and the conditions in which the commodity may be returned, the period for which the particular offer or price shall be valid, the minimal duration of the contract for contracts of constant or periodical delivery of commodities/services. Those who not perform the legal obligation for providing required user information can be fined in amount 300 to 3000 BGN.

5. Privacy and security
Data protection is becoming increasingly important issue for the customers in the e-commerce. Collection and the storage of personal data of the costumers should be made lawfully, with the implementation of adequate measures and modern technical resources for protection of the personal data of the costumers. The Law on Personal Data Protection requires the trader to be registered as a data administrator into the register of Personal Data Protection Commission. The law describes in details the obligations of the administrators of personal data. E-commerce websites must have a policy for personal data protection that is available and posted in a conspicuous place on the site. Published rules for the protection of personal data must be drafted in compliance with the law.

6. Online deals
Forming legally binding online agreements consists of the following main elements – an offer and acceptance, consideration and a capacity to enter into a contract. Enforceability of electronic contracts generally requires: sufficient notice of terms (particularly onerous terms specifically brought to attention); sufficient opportunity of the user to consider terms and to decline; evidence of acceptance of terms that is sufficiently clear and positive as to demonstrate actual consent to be bound by terms; the absence of terms that are unconscionable or greatly unfair.

Establishing the validity of an online transaction either by producing a document or record in writing, or recording or retaining of all the necessary information in electronic form, are the two ways in which a documentary record can be established that a transaction has taken place between the consumer and the business.

7. Return policy
The Law on the consumer protection which regulate the sales in e-commerce contains an unambiguous provision for the right of every costumer to return the purchased goods within seven days term after the delivery. The law does not require the presence of defects or inconsistency in the good quality; neither any reason for return has to be mentioned. The conditions upon which the right of return of goods purchased over the Internet cannot be exercised by the user are explicitly listed in the law. In any other case the entrepreneur should respect the legal right of the costumer and should accept back the purchased goods upon existence of the conditions for returning.

The legal framework for e-commerce is increasingly becoming complex even in one single jurisdiction. Things become more and more complicated when you are faced simultaneously with hundreds of potentially applicable legislations because you are entering agreements with customers located anywhere in the world.

The Internet provides many new sales and marketing opportunities and online business must adapt to this changing commercial environment.