Do Not Make these 3 Mistakes in Your Online Business

by Dawn Fotopulos on July 6, 2010

Solopreneurs and small business owners have an advocate in the brilliant Nina Kaufman. Here’s how to manage legal risk for your online business. Every small business owner must read this. DMF.

Copyright © 2010 Ask The Business Lawyer

Nina Kaufman Ask the Business Lawyer

Award Winning Attorney, Nina Kaufman

You have a brilliant idea at 3 a.m on a Saturday. You turn on the computer, access the internet and register your domain name. Over the next 24 hours, you set up a PayPal account, get a template website, slap up some copy and, voila! You’re in business. Online. You haven’t had to ask for permission. No pesky regulations or bureaucrats breathing down your neck. The sense of freedom is dizzying: The whole world is open and no rules apply. Right? Wrong. The same laws that apply to you at your office desk apply to your internet connections. What are the three online business mistakes that most entrepreneurs make?

1. Getting “bit” by your web development agreement. Plenty of entrepreneurs hire a web developer to build on their brilliant idea. Opening an online business without having your attorney review the web development agreement is like opening a corner café without reviewing the lease. If the developer buys the domain name or opens the hosting account, she owns it—not you. And you’ve just let your business become her hostage if there’s a dispute. Make sure you control those issues -otherwise, [the web developer] could shutter your business in a nanosecond.

2. Not identifying your intellectual property. Just as you thought (before reading this article) that cyberspace was the wild, new frontier, there are plenty of others operating under that same misunderstanding. First, are you using other companies’ trademarks? Imagine going on a major promo blitz and getting a nasty lawyer’s letter from Walla Walla, Wash., saying “Cease and desist-we were here first.”

You could end up having to redo all your marketing efforts, doubling your marketing costs. Ouch! Second, have you protected what you have? For a mere $45, you can properly copyright your website by submitting it to the U.S. Copyright Office. That’s a necessary prerequisite to filing a copyright lawsuit. But when you do that, you could be entitled to statutory damages of anywhere from $1,000 to $10,000 from anyone who ignores your cease-and-desist letter—which could be a good return on investment.

3. Privacy Policy Mish-Mash. Borrowing website terms from other websites, and pasting into your website will not cut it. Your website terms have to be specific to your business, or you risk running into legal problems for not sticking to so-called privacy policy. Are you sufficiently protecting your customers’ information? Are you disclosing the privacy policies of any third-party vendors on your website, such as those running shopping carts or publishing newsletters which appear on your website?

Read up on what the top attorneys on online business have to say. Be aware of legal terms you must have on your website ‘ in real estate, you should be aware of “FHA guidelines”; in social networking, it’s “Safe Harbor Act”. Cyberspace laws change all the time ‘ you have to keep in touch.

Save time, money, and aggravation when dealing with pesky business law issues! Check out the user-friendly resources from award-winning business attorney, Nina Kaufman, Esq., at She cuts through the legal gibberish in a way that entrepreneurs can understand. Get your free copy of her Intellectual Property Info Kit today!



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