So, you want to start an online business? Awesome! The Internet provides a huge new market.
Selling on the Internet may not, however, be as simple as just listing goods or services on a website. Since businesses can now sell easily in all 50 states, they can also get headaches in all 50 states.
Individual State Laws and Taxes
The law of e-commerce can be complex. If companies do business in multiple states, multiple laws and taxes may apply to what they are doing. Often, this difficulty can be tempered with forum selection and choice of law provisions in the contracts they use.
These clauses define which state’s laws will apply to a transaction, and where one will go to court in the event of trouble. They tend to be a good idea, especially in contracts where the deal crosses state lines.
Federal Laws and Regulations
The federal government is also involved in e-commerce because the Internet is a channel of interstate commerce. Depending on the business, the federal government may be more or less involved.
For instance, the Fair Credit Reporting Act may be very important to a financial services company. But virtually all businesses will want to be familiar with the Digital Copyright Millennium Act, the Electronic Communications Privacy Act, and the CAN SPAM Act.
E-commerce poses unique pitfalls, but a carefully considered legal strategy can help alleviate many of them. Contact Jabaly Law to set up a consultation for your new online business venture to ensure that you understand your federal and local legal responsibilities.
