Get Started Now
Sample HubSpot User

Sample HubSpot User

It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using 'Content here, content here', making it look like readable English.

Recent posts by Sample HubSpot User

10 min read

Why Using Google for Legal Problems Will Kill Your Business

By Sample HubSpot User on Dec 27, 2017 6:54:43 AM

Imagine yourself a half mile off the coast of Southern California. You want to go snorkeling, and you’re about to jump off a boat into the Pacific Ocean. You were visiting this area and did some quick research on best places to snorkel and found this lovely location as a top choice.


You can see crystal clear water and bright blue, green, and red coral beneath you. And you’re pumped to have your mind blown swimming with sea lions, sea turtles, and tropical fish you read about.


Before you jump in, let me ask you this.


What if you knew ahead of time there was an electrical short-circuit at a nearby oil rig that happened the day before? And that if you jumped in, you’d be electrocuted and eventually drown?


Of course you’d change your mind. But that’s kind of silly because how could you possibly know there was a short-circuit nearby?


You wouldn’t. Here’s why. No one would think to research something like that before going snorkeling. If you’re looking for snorkeling, you’re simply searching for a place with pleasant scenery.


You’re not going to think to look for information to confirm whether there are dangerous things in the area that could harm you.


You might see if there are sharks in the area because everyone knows about the dangers of sharks. But, there will always be other possible dangers--like jellyfish or other harmful sea creatures, oil spills, etc.--that you won’t research about ahead of time. And the reason is simple:


You’ll never look up what you don’t know you don’t know--what you never knew to search for.


This is why Google can kill your business.


But first, one major caveat: Google is really an INCREDIBLE resource. That’s Captain Obvious stuff, right there. Without Google, you wouldn’t have known where to go for the best snorkeling site in California!


And not only that -- Google is a great LEGAL resource. If you know what you’re looking for, Google can save you a ton of money vs. hiring an attorney or paying $$$ for an online contract template you could find for free with a Google search.


But putting aside the joys of Google, there are three problems Google doesn’t solve that will kill your business.

The 3 Problems That Cause Google to Kill Your Business


The problems are that:

  1. You have to know about “it.”
  2. You have to know the “why.”
  3. You have to know the pain of not following the “why.”

Google doesn’t address any of those problems. Instead, it creates a false sense of security that consistently destroys thousands of businesses each year that make avoidable legal mistakes.


Let’s start with the first problem.


1. You have to know about “it.”

The “it” is the problem itself. You have to know about the problem.


If you’re going to know you shouldn’t jump in the ocean, you first need to know there’s a problem--there’s an electrical current nearby.


In our example, you didn’t know there’s an electrical current nearby because you “didn’t know what you didn’t know.” You didn’t know you should’ve researched that issue ahead of time.


Of course, if you knew to check whether there were electrical currents in the area, Google would’ve been great! You would’ve gotten the information you needed and avoided that deadly snorkeling trip without a doubt.


But how does that apply to the legal world?


Here’s how. Let’s say you wanted to start a business in California. You might Google “starting a business in California” or something similar.

You’d do this because you need to get some information about starting a business, and you already know there are some legal formalities required.


If you did that search, here’s the top article you’d get:

 

From this, you’d know that you need to select a business structure, file for your tax IDs, and look into filing for licenses and permits.


If you continued to read other articles, chances are you’d find advice about hiring employees and contractors.


And if you were aware of other legal issues you needed to check out, then great. But most early stage companies don’t. It’s because if you “don’t know what you don’t know,” you wouldn’t have even thought to research these issues. If you never had encountered a problem before, chances are you wouldn’t know to look it up.


And no matter how much time you have to search, there’s always going to be lots of common legal problems or issues that new companies have that won’t show up in a general search for “starting a business in California.”


It’s like in our ocean example. You knew to search for the best snorkeling locations. And you might’ve known to look up “shark attacks” because everyone knows about that problem.


But, “electrical currents?” No way. Literally the only person that might look that up is someone who’d been electrocuted in a similar scenario. That’s it.


So what happens for the legal problems you don’t know to research when starting your business? Here’s a fraction of some of those issues:

  1. Failure to assign your IP to your company;
  2. Failure to require an NDA when sharing confidential information or otherwise protect it in sufficient ways to preserve the information’s trade secret status;
  3. Failure to do a trademark search when picking your business name;
  4. Failure to get the right terms of use and privacy policy on your website;
  5. Failure to require a written contract for contractors; and
  6. Failure to have the right type of operating agreement or bylaws

And that’s just for starters. We put together a list of over 125 other common mistakes that entrepreneurs made, and there are many more than that.


So, this is the first problem. And it’s a major one. Most entrepreneurs just simply don’t know about “it” -- “it” being the dozens of legal problems or legal issues they need to take care of.


This is especially awful because it’s preventable. For almost all those problems (more than 80%), it’s stuff you can DIY. As long as you know you need to do it and have a little guidance.


But, knowing the “it” is only part of the equation for avoiding the problems Google presents.

2. You have to know the “why”--“why it’s a problem”


The “why” is just as important. Let’s say you knew there was an electrical current near your snorkeling location from an article you read. You didn’t think anything of it, though, because it’s not like you’re going to touch the oil rig! You’re over 50 feet away from the rig.


That’s where the “why” comes in. Even if you knew there was an electrical current, without knowing why the electrical current is a problem, you wouldn’t know that it’s a problem that electricity in nearby water could harm you.


The “why” is that water, especially salt water, conducts electricity.


It’s similar to someone telling you that you need to have a written agreement with contractors. You might think that’s only necessary when you don’t really know the person.


Like, let’s say you’re having a friend design your website and logo. But, he’s your friend, and written agreements aren’t needed when you guys agree on a price and agree that you’ll both be fair.


But if you knew the “why” behind needing a written contract, it’d change things. One reason: your friend will own the design of your website and logo under copyright law unless you have a written agreement indicating otherwise.


Also, what happens if your friend thought he was just designing the home page? Not the blog, the FAQ, contact page, or anything else? You just said “website,” after all. What if that causes a disagreement about how much work he signed up to do.

Not having your agreement in writing just causes a lot of headaches for you because you haven’t spelled out the terms of the expected deliverables.


If you knew the “why” as to what you should do, or “why” something is a problem, you’d be a lot more likely to do it.

 

3. You have to know the “pain caused by not following the why.”


It’s the “pain of not following the why” that usually resonates best with entrepreneurs.


Back to the ocean -- and this example is a little more ridiculous, but, bear with me...


So, you know that the electrical current is in the water. You also know that the electricity could sting.


But, you don’t know the extent of the pain.


In fact, all you remember is touching an electric fence when you were a kid to test if it worked (true story from the author). And that it was a sting but no big deal.


So, you look it up on Google and you see that “yeah, if you’re within a certain amount of feet of the electrical current, it could be bad,” but after your research you decide you’re far enough away. So you touch the water just to test, and it doesn’t really sting.


So it’s a “once in lifetime thing,” you think -- you’re only out in this area once, and may as well just suck up a small, temporary sting (if any) to see all the beautiful wildlife in the sea beneath you.


What you didn’t know was that electricity could cause you to drown. It’s not necessarily going to “electrocute” you in the way everyone sees in the movies. Instead, the electrical current paralyzes your muscles, causing you to be incapable of swimming, which causes drowning.


You knew the “it” - electrical current.


You know the “why” - electrical current in water could cause electricity.


But you didn’t know the “true pain” - that it’s not from electricity, which you just tested, but from drowning.


That’s what happens in the legal world.


Like in our last example about having a written agreement with contractors. You now know that if you don’t have a written agreement, then your friend could own the design of your website and company logo. And you know that you need to specify the deliverables you’re expecting from him.


But you also need to know the pain.


What if your company takes off right when your logo is getting a lot of recognition. So you try to register your trademark before it’s too late but find out a competitor has purchased the rights to your logo from your friend.


You’d still be able to use it wherever you were doing business, but that’s it. If you wanted your business to expand, you’d have to switch logos and lose any goodwill that came with it.


Losing goodwill is a real pain.


You’ll lose customers. Your reputation could be tainted if the competitor develops a bad reputation (people will equate his mistakes to your company). Your advertising dollars won’t yield the return it used to because you’re essentially splitting the profits with your competitor.


Same thing with the design of your website--he can sell the rights to that. Then suddenly your website doesn’t have the same unique feel it used to have.


And this is just a fraction of the problems you might experience with a contractor. And contractor problems are just a fraction of the dozens, and sometimes hundreds of avoidable legal mistakes companies are making right now.


Now, bringing this all together...


So why does Google kill businesses?

It’s because people rely almost solely on a resource that can’t possibly know to provide search results for a search that never existed.


People rely on Google, which prevents them from knowing

  1. it (the problem),
  2. why (why it’s a problem), and
  3. the pain they’d incur from not understanding “why” the problem could hurt their business…


It’s because you can’t know what you never searched for.


But Google is better than nothing, right?


Sometimes, except when it’s not. If the choice is “nothing,” (that is, “no Google”) you at least still know you might be overlooking something. You might have a lingering anxiety thinking you probably should consult some professional to confirm you’re doing everything right.


This was like the pre-Google era. Then, business owners used to seek out one-on-one advice from attorneys, small business centers, mentors, etc. who were able to catch those “don’t know you don’t know” issues.


Now, at least sometimes, a Google search can make you think you things figured out. Google has helped allay some of the anxiety people have about knowing they were probably overlooking something critical. And this could create a false sense of security.


But truly the worst part of relying on Google to solve legal problems is this: you now don’t usually research something until you know it’s a problem that needs to be solved.

 

With most other issues in a business, that’s OKAY! You might miss out on some early revenue, but waiting to be reactive to a problem usually won’t destroy the business.


That’s not the case with legal issues, though. You have to know about the possible problem before it happens. Because once it happens, especially with early stage companies that can be ruined by any minor setback, it’s too late.


So, Google is a plus for businesses in many ways. Now, entrepreneurs feel more confident about solving their own legal problems--and that’s GREAT! Because it opens the door for many more entrepreneurs to pursue starting businesses in a way that wasn’t possible before.


Just make sure you know what you’re doing before you jump in the water.

(NOTE: Learn about 62 other common avoidable mistakes you could be making so you can solve them on your own with your free Complete Legal Guide to Running Your Company).

Topics: Avoidable Mistakes
4 min read

Terms of Use: Why Every Business with a Website (Even a Lemonade Stand) Needs One

By Sample HubSpot User on Dec 27, 2017 5:51:09 AM

What is a TOU and what is it for?

A long time ago, before you could just click on a button and watch whatever you wanted on TV, if you wanted to rent a movie, one of your options would be to go to Blockbuster. To rent from there, you’d sign up for a membership, choose a movie, pay, and leave. The card that came with your membership would describe rules related to renting a movie. In a nutshell, you couldn’t rent to other people, couldn’t make a copy of the DVD, and if you break it, you buy it. In short, rules to be followed. Now, these same kinds of rules are found on just about every website--usually right beside the “about us” and “privacy policy” links in the obscure, finely printed, and hardly-ever-viewed sections of the website.

However, the basic premise remains the same now as it does before with Blockbuster. Terms of Use – also called Terms and Conditions or Terms of Service – are legally enforceable agreements made between the owner of a website service or app and the user. Terms of Use can vary greatly depending on the service provided, but generally include basic ground rules about the type of conduct that is permitted when using the website or app, who is permitted to use the website or app, and limitations on liability and damages.

Do I really need all that, you might be thinking, I only run a small website providing custom donuts?

It would be easy to brush off including Terms of Use on your website or app, particularly if you run a small business since there is no legal requirement to adopt them. However, without a clear Terms of Use, you may open yourself up to litigation or other costly issues. Let’s take a look at these in detail, and how Terms of Use can prevent a worst case scenario:

1. Limitation of liability

Terms of Use are crucial in limiting a business’s liability. Without clearly stated limits on what users can or cannot seek damages for, a business leaves itself open to very costly litigation.

In our custom donut shop example, let’s imagine that the owner has neglected to include a Terms of Use on his donut business website, Donut Forget Me. A customer, Ann, places a larger order for donuts and pays the bill online. A few days later, Ann realizes that the computer she used to order the donuts now has a virus that can be traced back to the Donut Forget Me website. None of Ann’s work can be recovered, her computer is useless, and she loses her job. Ann sue Donut Forget Me for lost wages and damages.

This scenario can easily be avoided with the inclusion of a clear Terms of Use. Terms of Use generally state that the business cannot be held liable for direct, special, or indirect damages, such as Ann’s loss of salary or the infection of her computer. A Terms of Use would prevent Ann’s case from going forward, whereas, without a Terms of Use, Donut Forget Me may be held liable for Ann’s damages.

2. Choice of Law

Another important aspect of Terms of Use is that they can determine which laws will apply in case a dispute arises. For any business owner, deciding which jurisdiction a dispute must be brought in is a huge advantage and could save the business owner thousands of dollars.

Let’s take a look at our previous example again. Donut Forget Me is a business incorporated in Massachusetts, with a brick-and-mortar bakery in Boston. Our litigious customer Ann lives in North Carolina but has an intense craving for donuts from Donut Forget Me. She fills out an order online, and as the donuts are perishable, Donut Forget Me ships them overnight through FedEx. However, the smell of the donuts is so irresistible that the FedEx driver eats half the donuts before they arrive. Ann files a lawsuit against Donut Forget Me in North Carolina.

In this case, Donut Forget Me would be expected to travel to North Carolina on a regular basis for depositions, hearings, and ultimately, a trial. This would incur costs for airline tickets as well as accommodations and meals. If Donut Forget Me is a one-man shop, the owner would also face additional labor costs in hiring and training someone to run the business while he is in North Carolina. However, if Donut Forget Me had included a choice of law clause in its Terms of Use that limited any dispute to be brought in Massachusetts under Massachusetts law, litigation would proceed in Massachusetts and ultimately be less costly for the company. In addition to these cost savings, a business owner may choose a particular jurisdiction due to its favorable attitude or laws towards that business. For example, if Massachusetts had a history of ruling leniently on donut shop owners, but North Carolina did not, it would be wise for Donut Forget Me to include Massachusetts as its choice of jurisdiction in its Terms of Use.

3. Control

Lastly, Terms of Use also set out particular rules, allowing a business owner more complete control over his website. Terms of Use can articulate what type of conduct is not permitted on the site, such as leaving inappropriate comments or advice on how to commit a crime, scraping the website for commercial purposes, or reproducing content published by the business owner. Without such rules in place, a user cannot be held liable for inappropriate conduct.

For example, let’s say that Donut Forget Me allows users to leave reviews of each donut it sells. Donut Forget Me receives approximately 20 reviews per week, and the majority are very positive. One day, Donut Forget Me realizes that it has received 40 new reviews in 24 hours; when the owner of Donut Forget Me investigates this issue, he discovers that a user named Mr. Clown has been posting obscene, pornographic, and inappropriate comments on his website. Mr. Clown has even gone so far as to provide advice on how to kidnap children with Donut Forget Me mini-donuts. Donut Forget Me’s owner immediately deletes the comments, but they keep appearing. He is at a loss as to what to do.

Clearly, the comments by Mr. Clown are undesirable, and possibly open Donut Forget Me up to criminal liability. In this case, Donut Forget Me would have been wise to include Terms of Use that stated that users cannot leave comments that are pornographic, obscene, or criminal in nature and that Donut Forget Me cannot be held liable for any comments left by users. This would allow Donut Forget Me to block Mr. Clown from making further comments and would ensure that other users are presented with a professional website.

Including Terms of Use on a website or app has significant legal advantages that business owners should take note of. A well-written Terms of Use lays out the ground rules for users, crucially limits a business’s liability, and allows a business owner to determine which law will govern any disputes that arise. As shown above, even a small, one-man donut shop can benefit from having Terms of Use clearly stated on its website.

It is important to note, however, that Terms of Use can be written very differently depending on the business involved. Boilerplate Terms of Use that are available over the Internet may not cover your particular business needs. Although the main points outlined here are applicable to most businesses, it is often prudent to consult a lawyer to draft Terms of Use that are a particular fit for your website or app.

Topics: Website