For most businesses, building a website is the first step towards going digital. However, a website is not only about its look and feel and the content that it features. Your online posts are as legally accountable as your other business activities. If your website is collecting data, sharing content, or facilitating user interaction, you must have the right legal documents in place to safeguard it as well as your business.
Without these essential documents to safeguard it, even a small online venture can run into trouble. It can face multiple risks related to privacy breaches, customer complaints, or regulatory penalties. Internationally, there are multiple laws, which every website must comply with. In India, we have the Information Technology Act, the SPDI Rules, and the Digital Personal Data Protection Act (DPDP), 2023, that lay out clear rules about how user data must be handled and proper disclosures must be made on the website.
Having the key legal documents like Privacy Policy, Terms of Use, Cookie Policy, and Disclaimer Will keep your business safe and help it gain the trust of the users. These documents form the backbone of a legally sound website. They will create a foundation of compliance and credibility that will help your business grow for years to come.
In this guide, we will discuss these four essential documents that you must include on your website. We will also give you some ideas about how to draft these in the right way.
-
Privacy Policy
Purpose: Protecting user data and brand reputation
If your website is collecting or processing personal information, then it must have a privacy policy in place. The privacy policy tells the user of a website how the business collects, uses, and shares their data. The policy should also outline the business’s measures to ensure the safety and security of user data. It is a statement of the ethics and respect the company has for user privacy.
The Legal Context
Internationally there are several data protection laws that govern how websites must handle the personal data collected from the users. In India we have the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011, and the Digital Personal Data Protection Act (DPDP), 2023, that lay the foundation of the privacy of the users.
These laws require the companies to disclose to the users what personal data they collect, how the data is used and stored, and the data-sharing practices of the business. It must also expressly mention the rights that users have over their data, how they can withdraw their consent and the methods for grievance redressal.
Globally, similar provisions are upheld by laws such as the General Data Protection Regulation (GDPR) in the European Union, the California Consumer Privacy Act (CCPA) in the United States, and the Data Protection Act 2018 of the UK, etc. Each of these laws aims to ensure the principles of transparency, lawful purpose, user consent, and data security.
Any company operating in India must also comply with these international laws if their website receives visitors from abroad.
What a Strong Privacy Policy Should Cover
A comprehensive privacy policy should clearly explain the following:
- What data is being collected from the users. This may include contact details, browsing history cookies and payment data.
- Why the data is being collected.
- For what purposes will the data be used?
- With whom the data will be shared. This will include sharing within the departments of the organisation as well as with 3rd party services.
- How the users can access, modify or delete their data.
- Whom the users can contact in case they have any complaints or need clarifications.
The language of the privacy policy should be plain and accessible so that before sharing the data, the users will understand how it will be handled by the business. It must explain legal jargon to the users as much as possible so that the chances of any confusion arising are minimised.
Why It Matters for Business
With the increasing rise of online scams, users have become more concerned about their privacy than ever before. A company which transparently shares its data collection and handling practices is more likely to gain the trust of the customers than one which does not. When the customers clearly understand that their data is safe in the hands of the company, they are more likely to browse the website, sign up for an account, and fill out the website forms.
Apart from the users, the investors and partners after business also look at the privacy practices of the business. This makes the privacy policy document as strategic as it is legal. A company which has a missing or poorly written privacy policy can face user complaints, loss of reputation and various penalties under the laws mentioned above.
Best Practices For Writing A Privacy Policy
- Describe what data you will collect from the user, why, and for how long.
- Disclose whether you will be sharing or transferring the data outside your country.
- Outline the rights of the users, such as withdrawal of consent, correction of the data, or its partial or complete deletion.
- Include the detailed mechanism for grievance redressal and the contact information of the business.
- Mention the actual technical and organisational safeguards implemented by the organisation to protect the user data.
- Comply with the provisions of the Indian laws. Websites that receive cross border traffic must comply with the international laws like GDPR and CCPA too.
A Privacy Policy that is accurate, transparent, and consistent with both Indian and global standards strengthens compliance while building long-term trust with the users of the website.
-
Terms Of Use
Purpose: Defining the rights, responsibilities, and boundaries of the users
The Terms of Use (also called Terms and Conditions) defines how visitors can interact with the website, what they can and cannot do, and to what extent your business is liable. In effect it acts as a legal contract between the users of your website and your business.
A clearly written and legally enforceable Terms of Use agreement protects the interests of both the parties and minimises the chances of misuse, confusion, and disputes.
The Legal Context
Primarily, the Indian Contract Act 1972, and the the Information Technology Act, 2000, govern the Terms Of Use agreements in India. They validate the agreements formed through online acceptance or the “click-wrap” mechanisms. Under these mechanisms, a website user explicitly agrees to the terms and conditions by clicking an “I Agree” button or checking a consent box.
The IT Act 2000 also recognises electronic records and digital signatures, which give the online contracts the same legal validity as the traditional ones.
Apart from these laws, for the businesses which operate globally, the principles of international laws will also apply. Examples of search laws are the Uniform Electronic Transactions Act (UETA) in the United States and the EU E-Commerce Directive. Together these laws ensure that the electronic agreements become legally binding when users actively agree to them in the same manner as mentioned above.
Key Clauses Every Terms Of Use Must Include
A well drafted terms of use should contain provisions related to the following:
- User Conduct: This contains the rules for using the website and prohibiting unlawful or harmful behaviour.
- Intellectual property rights: The agreement must specify who owns the website’s content, trademarks, and software.
- Governing law and jurisdiction: the terms of use must identify the laws and courts that will apply in case of any disputes arising.
- Limitation of liability: This sets the boundaries on the liability of the company for any losses and errors.
- Termination clause: this must contain the conditions under which a user’s access may be suspended or revoked.
- Dispute resolution: this section mentions how disputes will be resolved between the parties. Some of the mechanisms may include arbitration or mediation.
Together these provisions will create clarity, determine misuse of the website, and help your business to manage risk properly.
Why It Matters for Businesses
A term of use agreement can be used for purposes other than giving legal protection to a business. For example, an edtech company can use these terms to specify how its course content may be used by these students. Similarly, a SaaS platform can limit its liability for downtime or data loss.
The transparency provided by the terms of use agreement reduces the chances of misunderstanding between the business and the website users, and it ensures smoother relationships with the other stakeholders of the business as well.
Best Practices For drafting terms of Use Agreements
- Establish how user consent is being obtained through clear clickwrap or sign-up mechanisms.
- Define the ownership of intellectual property.
- Mention what will be construed as permitted use of website content.
- Include the limitations of liability and indemnity clauses to manage risk.
- Identify the laws governing the terms of use and specify the jurisdiction of disputes.
- Include provisions related to arbitration or mediation procedures for faster resolution of disputes.
- Specify the conditions under which a user’s account may be suspended or terminated.
Having concise and transparent terms of use will help your website to operate smoothly. It will also ensure that the users know their rights so that your business stage is legally secure.
-
Cookie Policy
Purpose: Staying transparent about tracking and consent
Online cookies play an important role in improving the experiences users get while visiting our website. It also helps the businesses to understand how visitors browse the website and interact with it. However because cookies track user activity and sometimes collect personally identifiable data, the businesses must create and publish a cookie policy on its website to disclose how the cookies are being used by it.
The Legal Context
In India, the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011, and the Digital Personal Data Protection Act, 2023, set the rules for handling cookies and other online identifiers. These laws bring transparency into the data collection practices followed by the businesses, so that no data gets collected without getting express consent from the users.
Globally, the General Data Protection Regulation (GDPR) in the European Union and the ePrivacy Directive require the businesses to obtain explicit consent from the users before setting non-essential cookies. In the USA, the California Consumer Privacy Act (CCPA) mandates that all businesses must clearly disclose to the users what they will be tracking on their devices.
For any website which receives global traffic, following these international standards is necessary to ensure uniform compliance with these international laws. It will also help in building credibility in the eyes of the users.
What A Cookie Policy Must Include
A well-written cookie policy should describe the following:
- Types of cookies used: there are various types of cookies that can be placed through a website. These include essential cookies, analytics cookies, advertising cookies, and third-party cookies. The cookie policy must clearly mention which of these will be set.
- Purpose of each type: the policy must also mention what these cookies do. For example, the analytics cookies help in improving the website design, while the advertising cookies help in delivering personalised marketing messages and offers to the user.
- Consent mechanism: it should clearly define how the users can accept, reject, or modify their cookie preferences.
- Cookie duration: This mentions how long each cookie will remain active.
- Opt-out process: the cookie policy must contain clear guidance on how the users can manage their cookies through their browser settings or preference centres.
Why It Matters For Business
Privacy is a major concern for people nowadays and most of them are concerned about how they are being tracked online. Having a clear cookie policy on the website shows the respect the business has for the choices of their users. It also helps them to comply with both the Indian and global privacy laws and protects the organisation from claims of undisclosed tracking or data misuse.
In case of multinational companies, having consistent cookie policies across multiple jurisdictions will help in managing compliance and reducing regulatory risk.
Best Practices For Drafting Cookie Policies
- Categorise the cookies that are set by their function, e.g., essential, analytics, functional, advertising, and third-party.
- Explain the purpose served by each category of cookies and mention the data collected by them.
- Give the users the option to accept, reject, or modify their cookie preferences.
- Disclose the use of third-party tracking tools, such as advertising or analytics platforms.
- Specify the duration for which the cookies will remain active and the timing of their refresh.
- Websites that attract international traffic must follow the global concern norms.
Having a transparent cookie policy on the website will reflect the privacy consciousness of your business. This will go a long way in building digital trust and keeping your business compliant with the ever-evolving data protection laws.
-
Website Disclaimer
Purpose: Protecting against misuse and misinterpretation
A website disclaimer provides a legal safety net to a website. It clarifies to the users the limits of the responsibility of your business and helps in preventing misinterpretation of the information or services it provides.
Irrespective of whether the website is of an e-commerce platform, SaaS business, or an information portal, a well-crafted disclaimer can significantly reduce its exposure to legal claims made by the users.
The Legal Context
Disclaimers are treated as valid contracts by the Indian Contract Act, 1872, and the Information Technology Act, 2000.
Similar protections exist internationally under the EU E-Commerce Directive and the US Federal Trade Commission (FTC) Guidelines which encourage the online businesses to display the relevant disclaimers on their websites. Multinational companies must follow these guidelines to comply with international laws.
Types Of Disclaimers Websites Commonly Use
There are many types of website disclaimers that are available. Depending on the business you operate, your website may need one or more of these.
- Content disclaimer: This states that the information provided on the website is for general awareness only. The readers must not consider it as professional advice.
- Professional liability disclaimer: These disclaimers are important for consultants, advisors and SaaS businesses that want to limit their liability if the customer suffers any loss after taking a decision based on the content of the website.
- Third-party link disclaimer: These disclaimers clarify that the business is not going to be responsible for the accuracy or safety of the external links featured on the website.
- Affiliate or advertisement disclaimer: These disclaimers are required for websites that earn revenue from sponsored content or affiliate marketing.
Why It Matters For Businesses
Even minor misunderstandings related to the content or language of the website may escalate into reputational or legal challenges for the business. Hence, these disclaimers have become very important to protect it from liability. For example, a financial blog that offers insights on market trends must clarify that its content given on its website is for information purposes only and should not be taken as investment advice. Such disclaimers help in managing user expectations and prevent claims arising from the misinterpretation of the website content.
Best Practices For Drafting Disclaimers
- Clarify that the content provided on the website is for general information purposes only and must not be taken as professional or legal advice.
- State that your business will not be responsible for the external links or content provided by third-party websites.
- Emphasise that the users must act on the information provided on the website at their discretion.
- Tailor the disclaimers based on the business model of the enterprise.
- Maintain compliance, consistency, and transparency by referencing global standards like the FTC guidelines.
- Display the disclaimers prominently on content-heavy or advisory pages.
General Best Practices For Drafting These Website Documents
While each of these four website documents serves a different purpose, the following are some general best practices that must be kept in mind while creating and maintaining them.
- Customise the documents: Get these documents written by a legal professional in a customised way for your business. Do not use boilerplate templates or language.
- Clarity and simplicity: these documents must be written in a language that users can easily understand. It will be better to avoid jargon and complex language that will confuse the users.
- Visibility: display the links to all these legal documents in the footer of the website, as well as in the sign-up and checkout forms.
- Consistency: ensure that the clauses in these documents do not contradict each other.
- Conduct regular reviews: set a system of periodic reviews of all these documents to ensure that they are up to date. You must also update these documents when laws, features, or data practices change.
- User consent: capture, record, and store the consent provided by the users so that they can be referenced later.
- Record keeping: Maintain version histories of these documents and the consent laws to demonstrate compliance during data audits.
Following these general best practices will help you keep the website’s documents compliant with the prevailing laws. These will also make them easy to manage as the business grows.
Conclusion
A legally compliant website shows the maturity and trustworthiness of the business it belongs to. The four documents mentioned in this article play a key role in protecting the business, shaping user confidence, and creating an environment that helps it to grow without any hindrances.
Whether you are operating your business only in India or around the globe, having the privacy policy, terms of use, cookie policy, and disclaimer will align your business with both domestic and international data protection standards and also help in building operational consistency and credibility.
If you are interested in staying a step ahead in compliance management, then take a look at Legistify’s Legal Intelligence Engine, which utilises the power of artificial intelligence and automation to help businesses monitor the regulatory changes, update the documentation seamlessly and go faster with the help of predictive intelligence.
If you want to see how the tool can kickstart the next level of growth for your business, then book a demo of Legistify’s Legal Intelligence Engine today.
