Website Legal Issues

A variety of legal issues can arise in developing and operating a website.  As the development of e-commerce unfolds, an organization's website presents valuable potential benefits to the organization.  The internet provides tremendous business opportunities, whether the organization is a software vendor, a service provider, an author who wants to advertise their books, or an individual who wants to start an on-line business. 

A website, however, also exposes an organization to potential liabilities and violations of state and federal legislation and international laws.  This is one of the fastest growing areas of the law.  In some ways, it is practically impossible to address every conceivable legal issue that might arise in the operation of the successful Internet-based business.  Organizations must, at least, consider a basic range of legal issues when developing and operating a website.

Listed below is an overview of some of the issues most commonly faced by businesses developing and operating a website.  The list is broken down into do's and don'ts organized under three major topic headings.  This overview, while not fully comprehensive of all possible legal issues, provides an excellent starting point for understanding some of the most common legal issues facing businesses with websites in the United States.


  • DO get a written assignment and a Work-For-Hire Agreement from all independent contractors and web developers, to insure that the organization owns rights to the intellectual property that comprises the site, including the website's HTML code, design features, and user interface. Without a written agreement, a website developer may have a plausible claim for ownership of some copyrighted aspects of the developed website.
  • DO obtain federal or foreign trademark registration for important domain names to protect against a third party claiming trademark infringement.
  • DO review website content for accuracy, fair advertising practices, intellectual property rights and marking issues, and other regulatory related issues.
  • DO NOT assume that it is okay to copy contents from other websites. If you do not want to create your own content, then you will need to license the content from others.  Although there is a Fair Use provision under the United States Copyright Act for copying small portions of any particular work, the safest procedure is to simply license content that you do not wish to independently create.  Such a license might provide the right to distribute, alter, publish, or otherwise use licensed content, as well as provide representations, warranties, and any appropriate indemnification from the licensor.
  • DO register all important top-level domain names and variations of the same and consider international country code top-level domain name extension.
  • DO register a copyright agent with the United States Copyright office to help limit liability for some copyright infringement claims under the Digital Millennium Copyright Act.
  • DO post a policy regarding submissions from third parties to your website in the site's Terms and Conditions or Click Wrap Agreement. Third party content might appear on the sight in places like bulletin boards and chat rooms and may create liability based on defamation, harassment, copyright infringement or trademark infringement or other causes of action.
  • DO NOT link or frame other websites in such a way as to block the original source of origin or advertising and do not link or frame to websites engaged in activities, such as blatant copyright infringement.  Under various theories of liability, an organization might be found liable for trademark infringement, patent infringement, or unfair competition for framing another website.


  • DO post a Click Wrap, or Terms and Conditions Agreement on your website to bind users of the site.
    • A Click Wrap Agreement is a screen or page that presents a website's legal terms and conditions to a user and requires the user to click "I Agree" or similar wording for gaining access to the site for completing a transaction.
    • Terms and Conditions, or Terms of Service are legal terms usually accessible through a link at the bottom of a home page of the site, the review of which is not a condition to obtaining information on the site or completing a transaction.
  • DO include Proprietary Rights notices, disclaimers of liability, and warranty for the site, linking disclaimers, framing prohibition, a statement concerning the governing law and jurisdiction of any disputes, language conveying rights to use any content submitted to the site, return and refund policies (when applicable), rules for games or sweepstakes (when applicable), a prohibition on using the site to post obscene, infringing, or unlawful material, and rules regarding conduct on bulletin boards, chat rooms, etc.  (when applicable).
  • DO NOT post a policy and then not comply with it.


  • DO understand that security is a business and a legal issue.  A website's performance can be dramatically affected if a site is attacked.  In a business-to-business environment, your partners need assurance that your network is protected from hackers and the like.  In a business-to-customer model, your customers need to be assured that their transactions with credit cards, or otherwise, are secure.
  • DO post a security statement on your site and designate an employee to manage the organization's security responsibilities.
  • DO NOT forget that your website's technical architecture must be adequate for its purpose.  To reduce the likelihood of problems arising in this area, organizations might consider obtaining appropriate performance warranties and representations and indemnification from their website developers, website hosts, system integrators, and providers of relevant software and hardware components.




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