Operating an Online Marketplace – Key Legal Terms to Protect Yourself and Your Users

March 31, 2022

 

By Stephen Thompson

Online marketplaces, where buyers connect with sellers, are becoming an increasingly popular business model for budding online entrepreneurs.

One of the key legal challenges for the operator of these sites is to construct the legal relationship between itself, the buyer and the seller in such a way so as to avoid becoming liable to the customers of the sellers in respect of the goods and services sold on the sites.

Terms of Use

The purchase of goods or services from an online marketplace creates a contract between the buyer and the seller.

However, the operator of the site will ideally wish to avoid becoming a party to that contract. This is usually achieved by ensuring careful legal wording is included in the terms of use of the website. These terms of use will need to make it very clear that, as the operator of the site, you are only facilitating the contract and are not a party to it and that the terms of sale of the goods and services are between the buyer and the seller.

In addition to drafting careful legal wording for the website terms of use, it is fundamental to ensure that those terms are accepted by the customers using the site. This can be done in a number of ways but site operators will need to sure that they can clearly demonstrate that customers have been made aware of the terms and also accepted them. A common method to do this is to require users of the site to read the terms and then check a box to confirm that they have read, understand and accept the terms.

Terms of Contract

As the operator of the site, you will also need to consider how the terms of contract will be formed between the buyers and the sellers using the site. It may be that sellers will have their own terms which can be incorporated into the contract during the buying process, conducted via the website. Alternatively, you may wish to impose standard terms of sale between buyers and sellers. However, in order to do this, you will need a obtain the sellers’ agreement.

Bespoke Terms

Whether or not sellers wish to sell on the basis of their own terms, it’s not unusual for the site operator to put a contract in place between it and the sellers to, for example, ensure that specific minimum performance standards are adhered to. This will be important in developing the website brand and credibility.

Depending on how many sellers will be operating from the site, this could be achieved by way of a bespoke contract or terms of use on the site, which the sellers will have to adhere to.

Additional Key Website Terms

Terms between sellers and you as the site operator will need to deal with a number of other issues including the use of the sellers’ intellectual property, for example in marketing the sellers’ goods and services on the site.

In addition to contract terms, you will also need to ensure that the site has appropriate policies to deal with privacy and also cookies. Also, if buyers and sellers are going to be posting content, it may be preferable to have an acceptable use policy to regulate such activity.

As a site operator, it is crucial to consider implementing the above contract terms in order to avoid liability for the buying and selling activity being conducted on your site. It is advisable to seek professional legal advice to make sure that the terms you have in place protect you as much as possible.

If you have any queries about the above or another related matter, please contact Stephen Thompson on sthompson@darwingray.com or 07970 160166 for an initial free, no obligation conversation.

 

 

Contact Our Team
Catherine Burke
Partner
View Profile
Damian Phillips
Partner
View Profile
Fflur Jones
Managing Partner
View Profile
Gareth Wedge
Partner
View Profile
Mark Rostron
Partner
View Profile
Nick O’Sullivan
Partner
View Profile
Owen John
Partner
View Profile
Rhodri Lewis
Partner
View Profile
Stephen Thompson
Partner
View Profile

I have worked with Darwin Gray for a number of years and the level of service, professionalism and timely response is second to none. I would highly recommend Darwin Gray to any business.”

Becs Beslee, Dice FM Ltd

Darwin Gray have provided us with a first-class service for many years now. They really take the time to understand our business and develop relationships which results in advice and support that is contextualised and effective.”

Rebecca Cooper, ACT Training

We have worked with Darwin Gray for several years and have always found their services and advice to be first class.”

Karen Gale, Stepping Stones Group

An extremely professional and sincere company who make time for your queries and understand the need to break down certain facts and information to ensure everything is understood perfectly. I would highly recommend the company to anyone looking for any type of legal advice”

Gwawr Booth, Portal Training Ltd

PSS has worked with Darwin Gray for many years. We have always received an excellent service. Prompt and professional advice and support.”

Ledia Shabani, Property Support Services UK Ltd

We have used several departments within DG recently and we have been very pleased with an effective, efficient and down to earth service. Very happy thus far and I expect that we will continue to use DG.”

Guto Bebb, Farmers’ Union of Wales

Darwin Gray offer us truly superb services. Very professional, quick and services available bilingually which is very important to us, highly recommend.”

Iwan Hywel, Mentrau Iaith Cymru

My “go to” in urgent and time sensitive cases for direction, support and advice. The team are quick to respond to calls or emails for advice and support on all matters. Always explain complex matters in a way a lay person can easily understand.”

Margot Adams, Guarding UK Ltd