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You are here: Home / Articles / Contracts / How to Make An Online Contract Work in Your Business

How to Make An Online Contract Work in Your Business

So, you have decided to make your contract work with your sales process  by moving it online. Your clients are already there, so it makes sense. How do you start the process?

Can you simply place your offline contract online?

Maybe. If you are just going to use your contract for your current customers. If you are simply moving your contract to an electronic format, you can just place your contract online. How do you make sure it is “signed” and binding on your customer.

You must make sure acceptance is clear.

When your contract was offline, your customer’s signature was proof of acceptance. That was what you needed to enforce your contract. If you made updates, you simply had to get the updates (or new contract) signed. Online, it is a bit different. You must make sure your customer agrees to the terms. There are four requirements for acceptance of online terms:

Adequate notice of the terms

Online, you want to make sure that you provide notice of your contract. If you are simply moving your customer agreement online, this is pretty easy. You send them a link to your contract page, and require them to acknowledge in some way. If, however, you are using a contract online for a service that is also online you have to be a little more creative. You have to make sure your users have notice of the terms. That is easy enough if you have registered users. You just require your users to click the acceptance button before they register. After your users are registered, you have to make sure there is plenty of notice of changes before they go into effect. We have all experienced Google or Facebook changing their terms on us. Remember the popups every time you were on. The notices in your account. The banners up top. It was all part of making sure there was plenty of notice to every user that the changes were coming into effect. To do this, you need to know how often your users are online. You have to provide notice to everyone.

An opportunity to review the terms

It is not enough to tell your customers that the terms are changing, you need to make the changes available for your customers to read. It doesn’t really matter that they choose not to read the changes to the contract. But, you have to give them an adequate opportunity to read it. This is can be done by:

  •      linking to the legal page on the footer of your website
  •      including a link in every service email to your customer
  •      including a link in every invoice to your customer
  •      including a notice in the login screen or dashboard of your online service

Notice that taking a certain action is agreeing to the terms

Acceptance comes from taking some action online. That can be clicking the box, but typically it is more than that. Your customers are accepting your terms by reading your blog, commenting on your blog, using your information, downloading your white paper. You have to make sure to give them notice at every opportunity to remind them of the contract.

That is one of the reasons online users have grown so numb to the terms that affect them. They see it all the time. They just check the box to get what they want. 

Taking the action

If you have taken all of the steps you can to do these things, your customer will be bound by the contract by taking the action that is acceptance. The thing that makes online contracts different is you need to have documented this process. You need a process to make sure you can actually prove your client accepted if it becomes necessary. You track everything in your online business, do also track your customer’s agreement to the contract you worked so hard to create?

Online contracts receive far less push back than a standard customer agreement. Why? People assume it can’t change.

A tip for your business:

Your customer’s numbness to online contracts is not a license to be unfair. You owe it to your customer to make your terms fair and reasonable. Give to your customers what you say you give to them. Take care of your customers. Protect your business. Those ideas are not in conflict with one another.

If your customers try to start groups and petitions against your new terms. You are doing it wrong.

Have you taken your customer agreement online? How did you do it?

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After working with entrepreneurs for years, I realized that many entrepreneurs have the same legal questions. And the same problems. Many entrepreneurs, though they understand that legal is an important part of protecting your business, just put it off. You always think you can do it later. Until there isn’t a later.

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About Josh

I am a business lawyer who helps small business owners and entrepreneurs develop a clear legal plan to protect their business as it grows. I podcast, blog, and spend my time giving entrepreneurs a clear path to legal protection. Growing your business can only happen if you have a firm foundation.

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