Because the Internet is known as the “unknown” wild west at times when it comes to determining legal obligations and potential for lawsuits and legal trouble, it is strongly recommended that every website have legal terms and conditions governing privacy, the use of information, the use of the site and the sale of any services and products.

Many online entrepreneurs balk at having “legalese” on their sites in fear that it will reduce sales on their site.  This is definitely a legitimate concern.  In marketing, you do not want to add anything in your sales process that will cause a prospect to be confused, feel overwhelmed and “legalese” can overwhelm most anyone.

However, is it worth risking potentially significant liability?  I can tell you that after representing many clients in dealing with potential lawsuits and problems, the stress, uncertainty and the amount you can lose makes it most certainly not work it.

Plus, if you speak to any successful online entrepreneur (ones doing over a million dollars in annual sales) you will likely hear a story or two about some legal problems faced in their businesses.  And, they will likely emphasize to you the importance of having your legal agreements in place. In other words, if you plan on running an online business for the long term, you MUST have legal and risk planning as part of your business.  Do not wait until you are making hundreds of thousands of dollars to be shocked by risks and problems that could have been avoided.

When it comes to legal protection v. sales and marketing- there is a balance.  Keep your legal terms on a separate page and just link to them in the sales process. One really effective method used is to start your legal terms with a statement like “There are the terms that our attorneys require we include. . . ”

In your terms and conditions, avoid using unknown and legalese terms- have you lawyer write them so that they are easy to read and understand.

In your regular marketing copy, you can use the persuasive techniques taught by successful copywriters but be sure you are truthful and never deceptive.

A busy entrepreneur gets so engrossed in trying to handle all the different things that are required when starting and operating a business.  One major mistake of many first time entrepreneurs is that they sign contracts left and right without ever looking at them.

This can be a fatal mistake in business.  I understand that some contracts are take it or leave it so you must sign them if you need what the contracting party is offering, but in today’s world, there are ALWAYS options and so, at the very least you need to know what you are signing up to.

Here are some real life examples of where trouble can arise if you sign without reading:

1. One client of mine thought he was signing up to purchase $500 worth of supplies from a vendor.  There was a contract provision in his agreement that required a $500 purchase each and every month for 5 years.  Very different business deals. . . but given that he signed the contract, he is now liable for a $30,000 obligation he thought was only a $500 one.

2. Another client struck a relationship to sell her business product to a company at an agreed upon price.  She signed an agreement without reading it. In that agreement, was what is called a Most Favored Nations Clause which states that if she ever agrees to sell the product at a lower price for anyone, she must give this customer the same low price.  This is not fair.  What if she finds a customer who is willing to buy 100,000 of her product so she gives a lower price?  Now, this new customer gets that price as well.

3. A third example is the business owner who signs a contract which contains a noncompete provision in it.  All of a sudden, his business is very limited in where it can sell its products.  He never read the agreement and so now his business opportunity becomes 20% of what it was.

4. Another provision that contracts try to sneak in is the auto-renewal provisions which makes an agreement renew automatically . . .sometimes forever.  In many cases, you will not want to be tied into it forever.  And, having these contracts will affect the way you van grow and do business later.

Bottom Line.  There are many many sneaky provisions put into the fine print of contracts.  Sometimes they are not sneaky but just should not apply to your business relationship.  The ability to grow a business requires that you are always making sure that you are not legally agreeing to things that can hinder you, cause excess liability, create major monetary obligations or otherwise negatively affect your business plans.

The first step to doing this is to read your contracts before signing.  An even better step is to have your business attorney review your contracts so you can at least know what you are signing up to.

If there was only one tip I could give to business owners that will definitely reduce later problems, disputes and lawsuits, it would be to get every business deal and arrangement you strike IN WRITING.

Memories fade and different people attach different interpretations to business arrangements.  It is a fact of business that most plan never come out the way you expect and there are plenty of surprises along the way.  You do not want to add to this uncertainty by having no written evidence of what was agreed upon with the people you do business with.

If you survey the cases that business litigators have, you will see that many of them could have been avoided by having a written contract to outline the relationship between the disputing parties.

Also, if you survey experienced entrepreneurs, most will be able to tell you of a story where the failure to get something in writing costed them money, stress and headaches. .  all of which could have been avoided by having a proper written document.

A written contract not only will benefit you and others by properly reflecting a business deal, but you can also include other legal type provisions to protect you from being sued later or protect you from harm that could be caused by the other party.

In the business world, the written contract is the fundamental basis for everything you do that makes you money. It is also the basis for determining the value of your business.  Everything is in the documents.  Think about this when you are building your business.