I'm considering adding a feature to my site that will allow registered members to create their own online store, selling their own goods to other site users. They'd have a personal catalog of stock they own, an order form/shopping cart for their customers, and there'd be various payment options that must be handled by the store owner. I wouldn't be directly involved in any transactions. However, I just worry that I might be wading into dangerous waters. What are my responsibilities as the website owner, regarding the operations of individual store owners on my site? Could I be held liable for any cases of fraud, sales of pirated goods, etc? If not, then would charging a small fee for each transaction make me more culpable? Obviously there are other sites out there that offer such a feature, but for all I know they may have a busy team of lawyers behind them. I don't want to be faced with any legal hassle, so am I best to steer clear of the idea or am I fussing over nothing? Thanks for any advice.
Whether or not you would wind up having legal problems is one question, but what about the headaches in the meantime. I suspect you could craft some kind of click on agreement that would absolve you of any liability, but if people get frauded what they are going to do is look to the one that is easy to locate to resolve their problems, which means that you would likely get dragged into controversy. Is there some particular reason you are looking to do this? Will you be charging somehow? Would it just be you operating the site? -Gene
Valid points, thanks. I'd be thinking of having it work like eBay Stores (without the auction aspect), where members sell to members, and the site takes a small percentage from each sale for providing the platform. It wouldn't be an absolutely essential part of the site though (which is principly a community site/social network), so if it's going to bring major headaches then I won't bother with it.
I am not sure it would bring major headaches, but that is a possibility I think. Would the members have there own stores outside the platform you will provide, or would this be their only platform to sell? Do you have programming skills yourself? What you might be able to do is set up some kind of automated dispute system whereby those who think they were frauded use the system rather than actually try and contact you. Perhaps headaches could be limited by requiring the use of PayPal, so that way if anyone thinks they got taken they could just go right to PayPal and dispute it. -Gene
It wouldn't be a requirement for them to have their own stores outside my platform - I expect some would and some wouldn't. So let's say I restrict payment methods to PayPal (directing all disputes their way), and make users opt into an agreement stating that I am not liable. Would my back be covered then?
I think this can certainly be done to insulate you from liability, while at the same time making the platform available and making some money at it. If you do the PayPal thing that solves a lot, but it likely wouldn't let you take a percentage of each sale. I would think that you would be better off charging a monthly fee for use of the platform anyway, that way you make money even if no sales are forthcoming. I hope this information helps. -Gene
Thanks Gene, you've been a great help. The monthly fee is one I'll think carefully about, but you've put my mind at ease about the legal side of things. Much appreciated.