IT&IP Law: Local is good

You’re excited. Your business website is about to be launched. Your new website is in its final stages of testing, and then your website developer asks you: “We’ve added footer links to your Privacy Policy, Disclaimer and Terms of Use and Terms of Services. Do you have some wording you’d like us to use?”; You reply: “What!!?”, “mmm, I hadn’t thought about it” and “can’t we just copy and paste the Terms and Conditions of Amazon or Uber, they are good, are they not?” This is where it can all go terribly wrong.

Whether it’s suggested by their website developer as a viable option or they take the initiative themselves, many online business owners don’t see the harm in copying the ‘Terms and Conditions’ from a website similar to their own.

Here is why you shouldn’t do it:

It is illegal: Copying someone else’s Terms and Conditions is copyright infringement, which is illegal, similar to copying any other kind of content or work without the necessary authorization from the author.  We have even seen some organisations that have copied certain Terms and Conditions without even taking out the other company’s name.

Contract: Your website’s Terms and Conditions, along with your Privacy Policy (more about privacy later), is a business contract with your customer. This is where you have the opportunity to present to your customer on how you do business and the terms upon which you offer the goods or services.  The Terms and Conditions are also there to limit your risk and potential liability (that is if you have drafted it in accordance with the relevant legislation). When things go wrong, a court will first look at your website’s Terms and Conditions to determine your business relationship with your customer and the contract to which you have agreed to. If you’ve copied them from another site you’ll have difficulty relying on them to protect you and your business, especially if they are drafted to address the laws of another country.  In the worst-case scenario, misused Terms and Conditions could end up closing down your online business.

Local laws apply. Certain local laws, such as the Electronic Communications and Transactions Act 25 of 2002 (“ECT Act”), will apply to your online business as a South African business, especially when targeting consumers in South Africa.  E-commerce sites, for example, need to address the following:

  1. Time and place where the e-commerce agreement comes into effect (s. 23 of the ECT Act);
  2. Acknowledgement of receipt of e-mail communications (s. 26 of the ECT Act);
  3. Disclosures required (s. 43 of the ECT Act);
  4. Cooling-off period (s. 44 of the ECT Act);
  5. The website visitor / consumer must have the right to change, amend, vary, or cancel his/her agreement before finally contracting (s. 43(2) of the ECT Act); and
  6. Certain security obligations in terms of a payment system needs to be adhered to (s. 43(5) of the ECT Act). A business not adhering to this can be liable for any damage suffered by a consumer.
  7. Applicable law and jurisdiction

If your website’s Terms and Conditions don’t take into consideration the relevant laws, your business may face severe legal, financial and reputational harm.  For example, if you fail to comply with the provisions of the ECT Act in terms of items 3 and 5 above, the consumer may cancel the transaction within 14 days of receiving the goods or services under the transaction.  If a transaction is cancelled as a result of the aforesaid, the consumer must return the performance he/she received or, where applicable, cease using the services performed; and you (your business) must refund all payments made by the consumer minus the direct cost of returning the goods.

Furthermore, if you do business with users outside the borders of South Africa and you do not address jurisdiction or applicable law, your contract may be subject to foreign law and a jurisdiction far-far away from your business…this could result in a costly exercise to resolve a dispute.

So, before copying the Terms and Conditions of another website, ask yourself the question whether it is worth the potential damages or reputational harm it may cost your business.

For assistance on drafting appropriate Terms and Conditions for your online business, kindly contact our IT & IP department.

Website compliance audit

At De Klerk & Van Gend, it is important for us to ensure that our clients’ websites are compliant.  To encourage this, we will perform a free WebSite Compliance audit (valued at R2500) for each client that follows these simple steps:

  1. Read the article;
  2. Click on the button – “Website Compliance” at the bottom of the article;
  3. An email will open up with the heading, “WebSite Compliance audit”;
  4. Complete the questions on the email; and

Submit the email to us.

IMPORTANT: We will commence with the Website Compliance audit for your business after we have received 2 (two) emails from your business email address (i.e. your name@[your business website domain].com/co.za etc.] within 2 months subsequent to reading any two of our WebSite Compliance campaign articles and sending us the email as requested above.

Author: Gerrie van Gaalen (IT&IP Department)

For more information, contact our IT&IP Law specialist
Tel: 021 914 4020

This article is for general information purposes and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us At DKVG Attorneys for specific and detailed advice.