Do You Need an E-Commerce Agreement?

Commercial Web sites will often sell products or services provided by a third party. For example, your Web site may sell specialized equipment or internet-related services that will be provided by another company.

An E-Commerce Agreement can be the document that sets forth the contractual relationship between the Web site owner and the third party. The E-Commerce Agreement should cover the following matters:

• Product or Service. What is the product or service to be marketed on the Web site? Is it a whole category of products and services or only specific items?
• Fees. What fee or commission will the Web site owner get if the products or services are sold through the site?
• Customer Payment. How will customers pay for the purchases? Is the mechanism to be run through the Web site owner's site or through the third party's site? Who handles credit card related issues? How are payments passed on to the third party?
• Customer Information. Who will be deemed to "own" the customer and the information provided by the customer? Ideally, the Web site owner would "own" the customer as it was through its efforts that the customer was obtained. The third party, however, will often insist upon ownership rights. A compromise sometimes employed is that the parties "co-own" the customer or that each party has certain rights to use the customer information. Of course, this should all be consistent with the site's "Privacy Policy" and applicable law.
• Trademarks and Logos. The Web site owner will typically want to use the trademarks and logos of the third party on the site, and the agreement should grant the Web site owner a limited right to use such trademarks and logos. (Don't have a logo yet? Be sure to check out .)
• Term. What will the term of agreement be? Often, simple agreements are on a year-to-year basis. Occasionally, one party is given the right to terminate early on 30 or 60 days advance written notice. Make sure the term is long enough so that the time and resources spent on marketing the products and services is justified.
• Marketing. Will there be any specific marketing undertaken to highlight the third party's products or services? The third party may insist upon certain prominence or placement on the site and/or a minimum level of ads or sales.

Click here to view a sample E-Commerce Agreement that has been drafted more for the benefit of the Web site owner.

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