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Mark Grossman

Website Legal Audits

4 January 1999

An improperly created Web site can breed lawsuits. It's not the place to test the limits of the law. Once you put information out on the Net, it's there for anybody to see. It's the ultimate in unrestricted access. You might create a site for potential customers, but your competitors and enemies get to see it too. A cautious and conservative approach is the way to go. How cautious you need to be will vary depending on several things. The preventive medicine is a legal audit of your Web site.

As with almost everything with the Net, the precise legal standards for Web sites aren't easy to define as the law is in its infancy. The global availability of the Net and all the differing legal systems throughout the world has exacerbated the problem of establishing the applicable legal standard.

To some extent, you need to be concerned about the laws of every jurisdiction throughout the world. Complete compliance with every variation is an obviously impossible goal. How you cope with this fact depends on what you do and where you do it.

If you do business on a global scale, you'll have to be sensitive to the legal requirements of those countries that could have jurisdiction over your company. For example, although a computer in the United States may physically host your Web site, this may not stop you from being hauled into a foreign court. Worse, it's conceivable that they could hold your Web site up against their legal standards. Thus, you need to be sensitive to foreign legal compliance with your domestic Web site, no matter the location.

The Audit

Your Web site audit needs to consider many things. Some of it is just common sense, but some is uniquely Internet. Here's a sample of what should be considered in a Web site audit.

Information Accuracy

An obvious point, defamation and unfair and deceptive trade practices are examples of some things that you can have on your Web site that can get you hauled into a courtroom. It's essential that information is carefully review before it's posted to the Web.

Copyright and Trademark

Copyright and trademark law fully apply to the Web. If you post somebody else's logo on your site, make sure that you have their written consent. If material is copyrighted, get the author's permission.

If you want to frame another Web site within yours, get permission in writing. This is an area that's seen some well-publicized litigation recently. Although the law isn't well-established on framing, the cautious and conservative approach is to get consent.

Those who think that you must get consent to frame argue that enclosing somebody else's site within your frame is like making a copy of their site without their consent. Others think that framing is no more an illegal copy than just calling up the site on a computer. They argue that the material was put on the Web to be displayed on computers and that framing doesn't change anything.

Create a Web Wrap Agreement

While Internet law remains often nebulous, one way to reduce your legal exposure is to have your Web visitors enter into a contract with you by posting what's sometimes called a "Web Wrap Agreement" on your site.

Web Wrap Agreements are a natural evolution of "Shrinkwrap Agreements" which you see every time you buy new software. "By installing this software, you agree to be bound by the terms of this agreement" is typical Shrinkwrap Agreement language. "By using this Web site, you agree to be bound by the terms of this agreement" is Web Wrap Agreement language.

A well-drawn Web Wrap Agreement can help you to reduce significantly your legal risks. The most basic thing that can be put in every Web Wrap is a limitation of liability clause. So even if you get sued and lose, at least the maximum damage award against you is nominal.

To further insulate you from the claims of users, always have them agree that use of the site is at their own risk and that you disclaim all warranties. Also, on the flip side, include a clause making them liable to you if they upload things to the site like copyrighted or trademarked material that they don't have a right to use. This gives you some protection if a third party sues you for something posted to your site by a user.

One effective way to discourage my clients from getting sued over nonsense is by including a clause requiring that any lawsuit be filed in my client's home country/state, not the user's. Using the courts looks a whole lot less attractive as the mileage increases.

Be Proactive

Having your Web site audited is a good example of effective proactive law. Once you get sued, you can't require the other side to come to your home country/state if you didn't have the agreement already on the site. A little preventive law is much cheaper and less stressful than crisis law. Have your site audited now, not after it causes you a problem.

Website Legal Audits is republished from
Mark Grossman
Mark Grossman