Membership Agreements for E-Commerce Websites

E-commerce companies must include certain essential information and documents on their websites. Websites requiring registration need membership and user agreements. By approving the membership agreement during registration, a user accepts the website rules set out in that agreement.

The e-commerce website processes certain personal and contact information through the membership agreement. The agreement should also explain the legal responsibilities it imposes on the website and the user.

The agreement should clearly state how the consumer may use the website, the nature of the service and the rules that apply throughout its term. In this way it defines the boundaries of the legal relationship between the website and the user.

Those boundaries identify the legal responsibilities of the parties and set out their respective rights and obligations. A membership agreement should therefore describe the rights and obligations of both parties clearly.

Because a membership agreement is among the first documents examined in a legal dispute between a website and a user, it should be prepared without omitting relevant matters. This applies not only to disputes arising directly from online sales, but also to other disputes connected with membership. Where the agreement includes terms relevant to online sales and complies with applicable legislation, those terms may also be taken into account.

The agreement becomes effective when approved by the user. It must fully explain the conditions governing how the user may access and use the website after becoming a member.

What Should an E-Commerce Membership Agreement Include?

An e-commerce membership agreement should cover:

• The agreement's validity and effective date,
• The obligations and conditions accepted by the member,
• Conditions for using services offered through the website,
• Membership criteria and a definition of the member,
• How membership is activated,
• Obligations concerning the confidentiality of membership information,
• A statement that information supplied by the user must be accurate, together with appropriate warnings and limits of responsibility for incomplete or incorrect information,
• For websites making online sales, the distance sales agreement, payment methods and the user's responsibilities arising from the sale,
• Rules concerning public morals and other standards with which the user must comply,
• The website operator's obligations and scope of responsibility,
• A privacy notice explaining the personal data processed and the methods of processing,
• The term of the membership agreement,
• The competent courts and legal route for disputes arising from the agreement or other membership transactions,
• Provisions applicable in force majeure events,
• Legal conditions and protection relating to intellectual property rights.

What Should an E-Commerce Website's Terms of Use Include?

Terms of use should be available on every e-commerce website, whether or not membership is required. They are presented to users as a unilateral statement by the website operator.

The terms should explain how users may use the website and what the website operator expects of them. They constitute a unilateral declaration setting out the permitted use of the website and the standards expected of users.

Although terms of use may be presented for acceptance, the operator is not always required to obtain separate approval. They are prepared unilaterally and produce effects through the user's use and acceptance. While the user may not be required to click an acceptance box, the terms govern the user while they remain active on the website.

The terms should identify conditions users must observe while using the website, including its purpose and permitted manner of use, conduct that may constitute an offence, and the respective obligations of the operator and users.

Clear terms are particularly important for protecting the website operator where a user may commit an offence through the website.

You may contact our office for detailed information and legal support concerning these agreements.