Why bother with professional website terms and conditions?

Introduction

So you are thinking about launching a new start-up and you are weighing up whether you should write your own website terms and conditions or get a solicitor to do it.

Reasons you shouldn’t bother with professionally written terms and conditions

(i) Cheaper

On the surface using a solicitor is not cost effective. On a boot strap project, cost control is very sensible business management. A solicitor may be seen as a “nice to have” but hardly a priority. Lets face it, buying template website terms and conditions for £100 from a website that sells template agreements or finding a competitor’s website and lifting theirs is much cheaper than hiring a  lawyer. If you instruct a lawyer to draft policies for you, and your website is fairly sophisticated requiring several hours to draft then you could be charged between £3,000.00 and £15,000.00 based on an hourly rate. A magic circle law firm was able to charge £150,000.00 for drafting terms and conditions for a major project that required specific solutions to a myriad of problems.

(ii) No one pays any attention to them anyway

In addition, who reads these policies anyway? If you do end up in court, a forum that should be avoided at all costs, even if you have very carefully drafted commercial terms and conditions, a judge might not be particularly commercial, be -out-of-date regarding the Internet, or/and be biased in favor of the other party for whatever reason (the system is good but not perfect). They might see your fine technical legal point as being too academic or vague, and ignore it for a more practical view. Your points could even be missed because the other side has a better lawyer who is more persuasive or/and your legal representatives may be negligent. There are several other reasons why you might lose in court, even if you are on the right side of the substantive law, but a discussion on the shortcomings of the legal system is outside the scope of this article. Consumer protection bodies like the Office of Fair Trading do not necessarily have the resources to police websites vigorously to check that the majority are compliant with up-to-date laws. In-fact, the Office of Fair Trading and other protection agencies may not even be aware of all the Internet related regulations since there are new laws continually originating from Brussels.

Reasons for professional terms and conditions

(i) Minimise risk

Despite all these reasons why you don’t need website lawyers to prepare your website contracts, you would still be better off if you do. Simply put, you are paying to minimise your business risk. Although getting one of your employees to knock something together based on similar internet websites is far cheaper initially than instructing lawyers it could end up costing you much more in legal fees, damages, a fine or all three if you are ever sued or come under investigation by the authorities.

(ii) Content and Intellectual Property

– Original

Building your intellectual property is another reason. Not every work in a website is capable of copyright protection. Any works that are standard such as formal, non-proprietary standards and other technical specifications for building web sites are not copyrightable. Navigation systems may be capable of copyright but they have to be original. Even if they are original they may amount to an idea not the expression of an idea. Text, icons, photographs, graphics and code are capable of copyrightable authorship but again you must show originality as well as prove that they have been copied or adapted. It is not necessary that there is substantial copying. The bottom line is if you just buy a template agreement or cut and paste from other websites you cannot claim originality if others copy you. You are detracting from the value of your business from an intellectual property perspective, and potentially you are at risk of being sued for copyright infringement.

– Copyrightable text

Website policies including Website Terms and Conditions, Privacy Policy, Acceptable Use Policy, Returns Policy, End User Licenses etc are all copyrightable as text. Text is probably the easiest recognisable copyrightable content. It is pretty easy to tell if text has been copied.

– Damages

If your competitor or a completely unrelated third party has copied your website policies you can claim a separate payment of damages for each of the policies that they copied. The award of damages would be how much a notional license to use the text of all the works individually would be or alternatively how much it would cost to make a non-infringing version. In other words, how much would it cost a specialist solicitor to write the website terms and conditions. The point is that there is valuable know-how and skill that goes into writing these policies which the offending party has not had to pay for because they have simply copied yours. However, here is the problem. It is a complete defence to copyright infringement if the person bringing the suit is not the copyright owner. If like most people do, you prepare your website terms and conditions by lifting them from websites that are similar to yours, or/and you get a junior employee to prepare them for the most part in the same way, then they are not original and lack copyrightable authorship. Take a look at the Directive on the Enforcement of Intellectual Property 2004 implemented into UK law by the Intellectual Property (Enforcement) Regulations 2006. Regulation 3 of the IPER 2006 sets out the position regarding the assessment of damages.

(iii) Costs, risks and benefits analysis

On a costs, risks and benefits analysis, it is far better for you to get a professional to prepare your website policies, even if they charge a commercial rate. You will not only benefit from being up-to-date with compliance with the law and regulations, you will also own valuable intellectual property in the text of your website policies. Finally, you will also have a reasonable degree of protection, since solicitors guarantee compensation for loss and damage if their advice is negligent, by way of a compulsory professional indemnity cover required to be at least £2 million.