Launching an online business is exciting. It is also easy to skip the legal groundwork in the rush to get a product or service in front of customers. That decision tends to be costly. The legal documents your online business needs are not bureaucratic formalities — they protect you from liability, give you enforceable rights against customers and vendors, and are often required by law. Here is a clear-eyed look at what you need before you start selling.
Privacy Policy
A privacy policy is not optional. If your website collects any personal information from visitors — including names, email addresses, payment data, or behavioral analytics through cookies — you are legally required to publish a privacy policy in most jurisdictions.
What Must Be Included
California’s Consumer Privacy Act (CCPA) requires businesses that meet certain thresholds to disclose what categories of personal information are collected, how that information is used, and whether it is sold to third parties. The GDPR imposes similar requirements for businesses with European Union customers, with additional obligations around lawful basis for processing and data subject rights. Even businesses that fall below the statutory thresholds are still subject to the FTC Act’s prohibition on unfair or deceptive practices — meaning a misleading or incomplete privacy policy creates real legal exposure.
Your privacy policy should describe every type of data you collect, including data gathered by third-party tools like Google Analytics, Facebook Pixel, or email marketing platforms. It should explain how long that data is retained, who it is shared with, and how customers can exercise their rights under applicable law.
Website Terms and Conditions
Your website’s terms and conditions (also called terms of service or terms of use) are a contract between you and every visitor to your site. A well-drafted set of terms limits your liability, establishes how disputes will be resolved, and gives you a legal basis to enforce your site’s rules against users who violate them.
Key Provisions
The most important provisions for an online business are: a limitation of liability clause capping your exposure for certain types of damages; a disclaimer of warranties, making clear that you are not guaranteeing specific outcomes; an intellectual property clause establishing that your site content belongs to you; an acceptable use policy defining what users may and may not do on your platform; and a dispute resolution provision specifying whether disputes will go to arbitration, what law governs, and where litigation can be brought.
For terms to be enforceable, customers must have reasonable notice of them and an opportunity to review them before completing a purchase. A clickwrap agreement — where the user affirmatively checks a box or clicks a button to accept — provides the strongest enforceability. A browsewrap agreement, where terms are linked in a footer but not affirmatively accepted, is more likely to be challenged.
Shipping Policy
A clear shipping policy prevents disputes before they happen. It should specify estimated delivery times, the carriers you use, whether you ship internationally, and what happens when a shipment is lost or damaged. Without a written policy, customers can make claims based on vague representations made elsewhere on your site — including in marketing copy or automated chatbot responses.
Under the FTC’s Mail, Internet, or Telephone Order Merchandise Rule, you must ship within the timeframe you advertise, or provide customers with a revised estimate and the option to cancel. Failing to comply can result in civil penalties. Your shipping policy should be easy to find and written in plain language.
Return and Refund Policy
Some states require businesses to post a return policy or face a default right of return under consumer protection law. Even where no specific state law applies, failing to clearly communicate your return policy creates chargebacks, payment processor disputes, and potential FTC enforcement for deceptive practices.
Your policy should specify the return window, what condition items must be in to qualify for a return, whether you offer full refunds, store credit, or exchanges, and who bears return shipping costs. For digital products, the policy needs to address how refunds work for items that have already been accessed or downloaded. Be consistent — whatever your policy says, you need to follow it. Inconsistent application exposes you to consumer protection claims.
Business Formation Documents
Before you collect a single dollar from a customer, you should have your business entity properly formed. Operating an online store as a sole proprietor means your personal assets — your bank account, your car, your home — are at risk if someone sues you or you incur a debt you can’t pay. An LLC or corporation creates a legal barrier between the business and your personal finances.
LLC Operating Agreement or Corporate Bylaws
Forming an LLC requires filing articles of organization with the state, but the operating agreement is the document that governs how your business actually runs — how profits are split, who has decision-making authority, what happens if a member leaves, and how the business can be dissolved. Many single-member LLC owners skip this step because they assume it doesn’t matter if they are the only owner. It does matter — an operating agreement helps preserve the liability protection the LLC provides and is essential if you ever add a partner or seek outside investment.
Our attorneys work with online business owners on internet law and e-commerce compliance at every stage of the business lifecycle. Getting your formation documents right from the start avoids expensive restructuring later.
Additional Agreements You May Need
Depending on your business model, several other legal documents may be necessary.
Vendor and Supplier Agreements
If you source products from third parties, you need written agreements that specify pricing, delivery timelines, quality standards, and what happens when the vendor fails to deliver. These contracts also address intellectual property ownership — particularly important if you are selling branded or custom-manufactured goods.
Influencer and Affiliate Agreements
If you work with influencers or run an affiliate program, written agreements are essential. The FTC requires clear disclosure when someone is paid to promote a product, and the enforcement burden falls on the business, not just the influencer. Your agreements should specify disclosure requirements, content ownership, exclusivity, and compensation terms. An affiliate agreement should also include fraud prevention provisions — affiliate fraud is common in e-commerce.
Intellectual Property Assignments
If you hire contractors to build your website, write product descriptions, create images, or develop software, make sure your contracts include IP assignment clauses. Without a written assignment, the contractor — not you — may own the copyright to the work. This is one of the most common and most avoidable legal problems online businesses encounter.
Starting an online business with the right legal documents in place is significantly cheaper than resolving the disputes that arise when those documents are missing. If you are building or scaling an online store and want to make sure your legal foundation is solid, contact Revision Legal to speak with an internet law attorney who works with e-commerce businesses every day.
