7 Legal Mistakes You’re Probably Making In Your Online Business

Ever wondered if you’re unintentionally making small business legal mistakes?

Are you selling your products, services, or courses online?

Do you know for sure that they’re legally protected?


If not, then you’re in the right place!

Today, I’m going to share with you the Top 7 Legal Mistakes that smart business owners are unknowingly making, as they sell online.
As an attorney, I help smart mompreneurs make sure that they’re protecting their families and their businesses as they navigate the crazy world of motherhood and small business ownership.
So many business owners are making themselves legally vulnerable every single day – without even knowing it.
Protecting yourself legally is much easier than you may think, and it’s more important that you’d ever imagine. Before you spend even one more day in the unpredictable world of online business, take note of these seven legal pitfalls.

1. Selling as an individual

As a small business owner, you may be wondering if you need an ‘official’ business structure, like an LLC or S-Corporation in place. In a word, … yes! This is true even for you sole proprietors out there.
As an online seller, it’s essential that you set up a ‘legal protective layer’ between you and your customers. Otherwise, you risk putting yourself and your personal assets at risk. Talk to an attorney or an accountant to figure out which structure is right for you.

2. Accidentally breaking the law

When you operate a business online and sell online, you have to pay very careful attention to Internet Privacy Laws.
These days, people are more concerned about privacy than ever before – and rightfully so. Internet Privacy Laws maintain that a company must make available their policies, terms, and ways of doing business to any customers or potential customers.
You should have the following pages on your site:

  • a privacy policy
  • your terms of use
  • a disclaimer

Don’t be fooled by thinking no one reads these pages. That couldn’t be further from the truth, especially in the case of a dispute, confrontation, or legal action. A simple document stating your intentions and policies can cover your bases more than you’d ever imagine.

[Note from The Mogul Mom: You can read ours, here.]


3. Selling Without Using Protection

As an online seller, it’s imperative that you have buyers agree to your terms and conditions before you take their money. The terms of purchase need to reflect what you have laid out in your terms of use (as mentioned above). Skipping this step can leave you open to a lot of potential problems.
The easiest way to protect yourself and sell with confidence is to create an individual web page that outlines your terms of purchase and hyperlink it to your sales page. Before you allow payment to be submitted, have the buyer click a box that says, “I agree”, prior to completing their purchase. This shows that they are agreeing to the terms of the purchase and you avoid the hassle of a misunderstanding down the road.

4. Treating Friends Differently Than Strangers

One of the best parts of operating a business is being able to collaborate and do business with your friends. You have to be very careful, though, that you’re treating them with as much business and legal respect as you would a stranger.
When you invite them to contribute their material to your course or blog, you need to have them sign a guest contributor agreement, just as you would with any other contributor. It not only protects their copyrighted information, it grants you express permission to distribute their copyrighted materials.

5. Selling With Affiliates Unprotected

We all know that affiliate relationships are amazing for everyone involved. But before you put yourself out there, you have to make sure that you have your legal bases covered.
When you partake in an affiliate program (as a buyer or a seller), it’s important to have an affiliate disclaimer available in your website footer. (See? Those darn website legal notices are always popping up!) Without a proper disclaimer in place, you risk being inadvertently liable for the actions of your affiliates, and you definitely don’t want that! Especially if they engage in illegal advertising methods, etc.

6. Going It Alone

As a small business owner, there are so many things to consider. The good news is, you don’t have to do it on your own. There are plenty of resources available at your disposal. Legal resources are one of those that you simply cannot afford to overlook.
Whenever you offer something for sale online, you need to run it past a legal professional first. Whether you use a solid resource like Check Your Course that brings your legal issues to the surface, or hire your own attorney, you need to ensure your bases are covered before you start selling. Spend a few bucks now to save yourself a lot of hassle later on.

7. Offering “Lifetime Access”

We’ve all been smitten by the allure of the ‘Lifetime Access‘. It’s probably even sealed the deal for you a few times as a buyer. But when you’re the seller, it’s so important to define exactly what “lifetime access” means.

  • Whose lifetime are you talking about?
  • What if you want to end the course?
  • Do you really have to keep selling what you’ve created now when you’re 99?

To avoid tethering yourself legally to something beyond your control, simply define ‘legal access’ as part of your course participant contract, or terms of purchase on your sales page.
Then, have everyone agree to the terms before any money exchanges hands.

And there you have it, the top 7 legal mistakes you don’t want to make.


Did any of these common legal mistakes surprise you? Are you making any of them yourself?


Tamsen Horton

Seasoned attorney Tamsen Horton is motivated and committed to changing your experience with law. With her creation of Vujà Dé Law® and Launching Legal™ she is revolutionizing how law is experienced and delivered.




  1. Meghan

    Thank you for some other excellent post. Hope to see more posts on the legal issues small business owners make!

    • Melissa Bolton

      Our legal editor Tamsen Horton has a few things up her sleeve. Stay tuned!

  2. Wendy A.

    That was a fantastically written and highly informative article! Definitely need to cross t’s and dot i’s, so to speak. Thank you!!!

    • Melissa Bolton

      Glad you enjoyed it, Wendy! Tamsen is our go-to gal around here for all things legal. Let us know if there are any other topics you think you’d like to read about.


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