Checklist 2: E-business General Checklist :: Laurence Kaye

CHECKLIST 2 E-BUSINESS GENERAL CHECKLIST Introduction and Health Warning This is a general checklist for use in respect of setting up an e-business. It is not exhaustive and would need to be adapted or expanded to meet the needs of each online business. It is intended for general guidance and information only and does not constitute legal advice. We recommend that legal advice is sought on the setting up and running an e-business. 1

GENERAL

1.1

Details of the business, including business plan.

1.2

Does it involve the provision of goods or services or both?

1.3

In what industry sector(s) will the business operate?

1.4

In what geographic market(s) will it operate?

1.5

What is the business model? In particular: 1.5.1

Will any goods be sold online and delivered offline?

1.5.2

Will any services be sold and delivered online?

1.5.3

Will advertising be displayed on the site.

1.6

Is the business going to Web-based only or will it be offered via other digital channels (mobile phone, interactive tv etc.)

2

STRENGTHS AND WEAKNESSES

2.1

Please identify the strengths of the business and/or your contribution to it. This could be: 2.1.1

Technical expertise

2.1.2

Intellectual Property

2.1.3

Marketing and sales

2.1.4

Financial resources

2.1.5

Key relationships with potential or actual customers or suppliers

2.1.6

Other.

2.2

Please think similarly about weaknesses or gaps you may have in respect of the business.

2.3

If the business involves, or might involve, partnering with other parties in any capacity (contractual relationship, shareholders etc.), please think about their strengths and weaknesses as well. This is particularly important if you have forthcoming negotiations with third parties.

3

ESTABLISHING THE BUSINESS

3.1

Details of the entity that will carry on the business

Page 2 20 October 2008

3.2

If the entity does not exist, obtain details of the proposed shareholders, directors, auditors and related information.

3.3

If the entity will be a joint venture, obtain details of the joint venture parties

3.4

Check whether tax advice is required in relation to the incorporation and residence of the entity and, if so, who will provide the advice.

3.5

Regulatory issues: 3.5.1

Does the business require any licence(s) in order to operate its business

3.5.2

If so, identify and consider timetable for obtaining them.

3.5.3

Does the creation of the entity, or the carrying on of its business, raise any anti-trust or competition law issues at a national, EU, US or other level?

3.5.4

If so, consider the ramifications and required actions. These might include: 3.5.4.1

Applying for clearance(s);

3.5.4.2

Modifying the business or its participating parties;

3.5.4.3

Modifying the scope or terms of business.

3.5.4.4

Seek legal advice on compliance with applicable EU Directives and laws or regulations made under it.

4

PROTECTING (AND CONTRACTING WITH) THE CUSTOMER

4.1

Will customers be acting in the course of a business or as consumers: 4.1.1

4.2

4.3

Refer to the Distance Selling Directive for a definition of “consumer”

Identify the information that must appear on the site as a matter of applicable legislation: 4.2.1

See Distance Selling Directive and national regulations made under it

4.2.2

See Electronic Commerce Directive and The Electronic Commerce (EC Directive Regulations) 2002 which implement it.

Data Protection: 4.3.1

Check data protection registration procedure

4.3.2

Create Privacy Policy Statement.

4.3.3

Establish whether any “sensitive personal data” will be collected and, if so, advise on implications (i.e. the need for positive consent to process those data).

4.3.4

If personal data are going to be exported outside the EU, check the Guidance Note on “exporting personal data outside the EU”.

4.3.5

Establish other procedures required to comply with Data Protection Principles: 4.3.5.1

“opt-in” where required for e-mail marketing in compliance with The Privacy and Electronic Communications (EC Directive) Regulatons 2003;

Page 3 20 October 2008

4.4

4.3.5.2

Complying with subject access requests;

4.3.5.3

Security procedures

4.3.5.4

Dealing with “old” personal data

4.3.5.5

Contracts with third party data processors

Contract with Customer 4.4.1

Online contract or offline?

4.4.2

In the case of online, establish whether there is any legal requirement for the contract to be in “signed in writing” and, if so, whether this will prevent the conclusion of the contract online (with or without a signature).

4.4.3

Define the information that has to be given to the customer, and the procedure to be followed, in order to make a valid contract online, including any applicable rights of cancellation. For that purpose: 4.4.3.1

Check Distance Selling Regulations

4.4.3.2

Check E-Commerce Directive and The Electronic Commerce (EC Directive) Regulations 2002 which implement it.

4.4.4

In most cases, the user should be required to click on an “I accept” button before proceeding to use the service.

4.4.5

Contract Terms: 4.4.5.1

Develop appropriate User terms.

4.4.5.2

Use legal notice/disclaimer, when appropriate

4.5

Customer Verification (e.g. for MoneyLaundering purposes), if relevant.

5

INFRASTRUCTURE

5.1

Check and review specification for the design and build of the site

5.2

Make sure Website Development Agreement governs all the necessary aspects of the relationship with the designer/builder, including:

5.3

5.2.1

Acquisition of all the necessary ipr‟s

5.2.2

Obligation to design and build site in accordance with pre-agreed specification and within agreed timetable (subject to agreed extensions)

5.2.3

Testing and acceptance procedures

5.2.4

Rights to use any third party software or other products used to create and run the site.

5.2.5

Provision and updating of content.

Make sure Website Hosting Agreement (see our Checklist) governs all the necessary aspects of the relationship with the host , including 5.3.1

Site hosting.

Page 4 20 October 2008

5.3.2

Site maintenance.

5.3.3

Service Level commitments.

5.3.4

Warranties

5.3.5

Termination and effect of termination

5.4

If the Site is „E-commerce enabled‟ (i.e. the customer can buy and pay for products and services online), consider the applicable e-commerce software agreements and agreement(s) for payment.

5.5

If you are using an Application Services Provider, make sure that it governs all the necessary aspects of the relationship.

5.6

If the site involves the use of electronic signatures, consider terms of contract with certification authority.

5.7

Trade Marks:

5.8

5.7.1

Have you registered a trade mark for the goods or services to be offered via the site?

5.7.2

If not, have trade mark searches been carried out to ensure that its brand(s) does not infringe any existing registered trade marks?

5.7.3

Consider similar issues in relation to your domain name(s).

Patents: 5.8.1

Does the business involve a process that may be patentable?

5.8.2

If so, consider patent application via patent agent.

5.8.3

Meanwhile, ensure process is protected by non disclosure agreement.

6

CONTENT

6.1

Carry out “legal healthcheck” of all the “content” that will appear on the site (audio-visual files, literary material, photographs, news, advertisements, competitions, lotteries etc.).

6.2

In relation to copyright material, check whether you own the copyright (either by assignment or because it is created by an employee) and have the right to licence customers etc to use it.

6.3

In the case of third party material, review any applicable Contributor‟s Agreement, Content Supply Agreement or the like.

6.4

In relation to all content, check whether content clearance procedures are required (e.g. libel reading because of the nature of the material).

6.5

Consider your exposure where third party material is hosted on the site and, if so, steps to mitigate the risk.

6.6

In the case of advertisements carried on the site: 6.6.1

Consider ASA codes.

6.6.2

If consumer credit advertisements, consider applicable regulations.

6.6.3

If “investment advertisements”, advise on need for their issue to be approved by an “authorised person.

Page 5 20 October 2008

6.6.4 6.7

Consider any other “product or service specific” regulations that may apply to the particular advertisements carried on the site.

In the case of linking and framing, check our FAQ.

Laurence Kaye Laurence Kaye Solicitors © Laurence Kaye 2008 T: 01923 352 117 E: [email protected] www.laurencekaye.com http://laurencekaye.typepad.com/ This checklist is not intended to be exhaustive and it does not constitute or substitute legal advice, which should be sought on a case by case basis. Please feel free to copy or make available this checklist without modification in print or electronic form for noncommercial purposes. If you do so, please include this disclaimer and copyright wording with attribution. If you want to re-publish or make the whole or part of this checklist available in a commercial service or publication, please contact the author at [email protected].