You need legal notices for your Online Marketplace

Making money online can be difficult. Many people try to do it by brokering transactions between people who want and people who have. This type of website is called an online marketplace. It can be very lucrative if you can build a critical mass or people who want something and people who are able to supply it. But, building two groups of critical mass requires your business model to be legally sound, your users to be confident, and you to be prepared for any legal problems that arise. This is why your online marketplace needs legal notices.

The two types of users in an online marketplace

An online marketplace is a website that facilitates transactions between two types of users, usually:

• ‘buyers’ and ‘sellers’ in the case of goods; or
• ‘customers’ and ‘providers’ in the case of services;

in exchange for a transaction fee payable to you by one or both types of user when a successful transaction is concluded between them.

Goods or services

Goods include:

• physical goods like books, DVDs, or clothing; or
• digital goods like eBooks, downloadable software, or digital stock photography.

Services include accommodation, transport, or professional services.

Any website that lets users browse other people’s or list their own goods or services for sale to other people is generally an online marketplace.

Legal considerations

Online marketplaces combine elements of online stores and an online communities. As a result, they have many of the same legal considerations covered by legal notices for an online store. Additional considerations for an online marketplace include:

• Liability for users’ conduct towards other users of your online marketplace;
• Disputes between buyers and sellers or customers and providers; and
• Refunds of transaction fees for unsatisfactory goods or services.

So what legal notices should be displayed on an online marketplace?

Legal notices

• Website Terms of Use: to limit your liability and protect your website against intellectual property infringement.
• Buyer or Customer Relationship Terms: to regulate your relationship with anyone who registers on your website as a buyer or customer.
• Seller or Provider Relationship Terms: to regulate your relationship with anyone who registers on your website as a seller or provider.
• Warranty and Returns or Refunds Policy: to handle any returns or refunds of any goods or services sold by sellers or providers through your online marketplace.
• Privacy Policy: to regulate how you process personal information on behalf of anyone who registers on your website and help you comply with the Protection of Personal Information Act.
• Security Policy: to set out how you process credit card payments yourself or through a payment gateway.
• Copyright Notice: to sit at the foot of each page as a declaration of your copyright.

How will legal notices for an online marketplace help you?

• Make money – by ensuring that buyers or customers have the confidence to transact with sellers or providers through your online marketplace, for which you receive a transaction fee.
• Manage your risks – for example, what happens if one of your sellers sells something they don’t own or one of your providers damages something in providing a service and the buyer or customer tries to sue you?
• Protect your intellectual property – that you’ve spent much time and money creating.
• Comply with relevant laws – like the ECT Act, the CPA, and POPI so that you don’t expose yourself to unnecessary risk.