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Westminster Legal Group
COPING WITH THE COVID-19 CRISIS AND OPPORTUNITY (Webinar re-broadcast)
Original broadcast through the Northwest Chamber of Commerce on 3/26/2020.
Business, Human Resources & Legal aspects and guidance
for running your business during the Crisis
Click here to view.
GENERAL DATA PROTECTION REGULATION COMPLIANCE: DOESN'T APPLY TO YOUR ONLINE BUSINESS? NOT SO FAST.
If you do any business or provide services to customers on the Internet, May 25, 2018 is an important day. That Friday is the deadline for companies to implement and comply with the European Union’s General Data Protection Regulation (GDPR) that governs the collection and use of personal identifiable information. Personal identifiable information includes any data that can be used to identify a specific individual or to distinguish one person from another. Such data includes, but is not limited to, names, addresses, telephone numbers, email addresses, birthdays, social security numbers, credit card numbers, login names, profile photos and images, demographic information and even IP addresses.The GDPR governs what companies must do to receive, maintain and protect personal identifiable information that they request, receive and collect from their customers on the Internet. The new law has very significant fines and penalties for non-compliance.
Do you think that the GDPR does not apply to you because you are a company in the US?
Not so fast. Even if your business is outside of the European Economic Area (another name for the geographic areas occupied by member nations of the EU), GDPR regulations will probably affect your business. It definitely will apply if your company collects or stores any data from any customer or person who sends that information (whether knowingly or unknowingly) from within any nation that is member of the EU. Furthermore, all business, even small businesses, are subject to GDPR enforcement and regulation and so this is not something that your company should ignore or overlook.The new law clearly applies to electronic and digital data collected through the Internet – so this means that e-commerce platforms, social networks, business websites and other platforms used for cloud computing that exchange and store data from its visitors are definitely subject to the new regulations. Because e-commerce and the Internet are basically borderless, companies may find out that they are subject to GDPR requirements without knowing it, and so all companies who do business on the Internet are well-advised to comply with the new laws in order to avoid any serious surprises and consequences.The following countries are currently part of the EU and any information your business collects (whether knowingly or unknowingly) from persons in these countries is governed under the GDPR: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom (Until March 29, 2019).As a business owner or company with an online business presence, you will need to understand and assess what kinds of data your company collects and controls. The GDPR requires that you receive specific and express consent to collect and process someone’s information and requires you to keep only the minimum amount of data required for the purposes for which it is used. Your company is also responsible for third-parties who manage and process the data you collect, so mere finger-pointing when something goes wrong will not suffice.The penalty for technical noncompliance is the “greater” of either €10,000,000 (currently $11,852,905 US) or 2% of your company’s global revenues. The penalty for more serious noncompliance, namely violations of certain key provisions of the GDPR, is the “greater” of either €20,000,000 or 4% of your company’s global revenues. Obviously then, compliance with the GDPR may make the difference between your company's solvency and insolvency.The task of complying with the GDPR is daunting but effective safeguards should be fairly easy to implement. A starting point to evaluate your company’s risk is to examine the following:
What kinds of data do you have, where is it stored, and how secure is that information from possible hackers or thieves? (The GDPR is particularly sensitive to the collection of children’s data.)
Where does the data come from, and how are input into your company’s system?
What kinds of security protocols does your company use to prevent data breaches and are the procedures clear and effective?
Do you have someone in the company who is specifically dedicated to oversee privacy and security protocols?
Small businesses (companies with fewer than 10 employees and annual revenues of €2,000,000, or about $2.5 Million US) are exempt from certain portions of the new regulations. However, the GDPR does not decrease the penalties and fines for small businesses that violate or ignore the requirements. Therefore, even small businesses must be careful to remove private data if there is no valid business justification or purpose for retaining such information and to comply with all applicable provisions of the GDPR.Even if the GDPR absolutely, certainly and undeniably does not apply to your company (which is increasingly unlikely in today’s global and technological world), data security and records handling is still obviously an important part of your business that cannot be ignored. At a minimum, we suggest that you consider implementing at the least the following when asking customers and visitors for their personal information:
Be specific and concise about the kind of information that you are asking from your customers and visitors and make sure that they consent to each category of information.
Keep your consent requests separate from other terms and conditions governing your customers and visitors’ use of your website and services.
Use Opt-Ins that require customers and visitors to actively give their consent; do not assume permission merely because they choose to continue to use your website and services
Identify, when available, any third parties who will rely on the consent
Make it easy for individuals to withdraw their consent at any time and provide a clear way for them to do it
Remove personal data of anyone from your system whenever they request (except for minimal record keeping items for law-enforcement and court-related purposes)
Create and maintain a record of consents that you from your customers and visitors (i.e., who, when, how)
Examine your consent practices and existing records routinely.
TOP 7 CONTRACT TERMS YOU NEED TO UNDERSTAND BEFORE SIGNING
People often ask me, a business lawyer, what I look for when
I review contracts. My unvarying response is “everything.” That, by the way, should
also be the response of any competent and careful attorney charged with
protecting a client’s interest.
The point of a written contract is to clearly state the
parties’ respective expectations. Contracts should also provide unambiguous
guidance for frequently-encountered situations that may arise during the course
of the parties’ contractual relationship. Every contract is unique. Contracts also
vary widely in scope and quality depending on the level of skill and experience
of the person drafting them.
Experienced attorneys do not necessarily need to opine on
every single term or paragraph in a contract. However, a careful attorney will
normally review everything the contract contains. This is so that the client
will not encounter unpleasant (and likely consequential) future surprises that
could have been identified in advance through a careful and thorough review.
Of course, the most basic components of a contract, such as the
date of the contract, sale price, salary, loan amount, or rental rate - among
other things - should always be identified and clearly understood. These are
things that most non-lawyers understand to look for without the counsel of an
experienced attorney. However, there are other contractual terms that are
frequently just as important and must not be overlooked.
Here is a short list of the Top Seven Things that you should
always identify and understand before signing any contract:
1. The identity of the parties.
It is vital to know exactly who you are dealing
with. Oftentimes, a salesperson or vendor presenting you with the contract is
merely an intermediary for someone else. A salesperson or vendor could
rightfully owe you nothing after they have obtained your signature. You need to
know who to go to if you encounter a problem. Conversely, you also need to know
and understand to whom you owe your contractual obligations.
2. The duration of the contract and surviving
Do you intend to be bound only for several days,
a month, a year, or perhaps only until the job is done? Aside from knowing when
your rights and obligations will expire, you also need to understand how long
after your performance the other side can hold you legally accountable to do or
perform other things. Many contracts will require that certain duties (for
example, warranty and repair requirements) survive the completion of job or the
3. Terms defining default/breach and specifying
Understanding terms of breach and the sorts of remedies
a contract offers is extremely important. Otherwise, you could violate the
terms of the contract without knowing it. You also need to know to what extent
you are liable to the other party if you fail to perform. These terms will
spell out what will trigger liability and dictate the other side’s right to
take you to court to seek a remedy. Most well-written contracts will also
control what kinds of remedies are available to an aggrieved party. Sometimes
the remedies are the same that the law generally provides, but frequently they
are not. It is important that you know what circumstances will expose you to
liability and also the exact consequences.
4. Assignment clause.
Many contracts allow one party to transfer its
obligations and rights to someone else who is entirely unrelated. If working
with the same person or company over the course of a contract is important to
you, you need to understand when and how the contract can be assigned to
someone that you potentially do not know or have never dealt with. It is entirely
possible, for example, that the other side may have the right to transfer the
contract to someone else who may not be as qualified or perhaps be incapable of
furnishing the result that you expected when you signed the contract.
5. Forum Selection Clause.
It is critical for you to know where you can
take the other side to court if there is a serious problem. Most well-written
contracts identify a specific jurisdiction or court in which you can file suit
or where a lawsuit may be filed against you. This is important because, realistically,
it will make it much more expensive for you to recover damages - for example - if
you live in Chicago but the contract requires you to file a lawsuit in New York
City in order to vindicate your rights. Conversely, it may also be much
costlier for you to defend against a claim in Anchorage, Alaska if you live in
6. Attorneys’ fees provision.
Many contracts contain an attorneys’ fee
provision which states that the party prevailing in any lawsuit or dispute has
the right to recover its attorneys’ fees and legal expenses from the other
side. This clause is important in that it may control the dynamics of the
contractual relationship and is oftentimes a significant factor in determining
whether it makes more sense to sue or to settle. For instance, a party will
probably not file suit to recover fifty dollars. However, if the contract
allows that party to also recover its attorneys’ fees and legal expenses, that
may change the dynamics enough to make it worthwhile to file suit.
7. Arbitration clause.
Contracts may or may not contain an arbitration
clause. However, they are more frequently seen in contracts when one side has
significantly more bargaining power or financial resources over the other.
Arbitration clauses often prohibit an aggrieved party from filing suit in a
court and have the dispute tried by a jury. These arbitration clause will instead
require the parties to enter into binding mediation or arbitration. The courts
have widely enforced arbitration clauses, and it is important to know if you
will not be able to vindicate your rights in court if something goes wrong. The
ability, or inability, to file a lawsuit in court often affects the dynamics in
a dispute. Generally speaking, it is often more beneficial for the party who
does not have the means or resources of the other side to have the right to
have the case litigated in court and tried by a jury of peers.
There is a high likelihood that something in a contract will
be missed, misinterpreted or misunderstood without the benefit of a thorough
review and guidance of an experienced attorney. It is my general opinion that
non-lawyers who enter into contracts without first seeking the opinions of an
attorney do so at their own peril. However, I also recognize that someone may
not always have the time, money, or resources to engage a lawyer. In those
cases, it is imperative that – at the very least – the components identified
above be identified and understood before signing.
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WESTMINSTER LEGAL GROUP focuses on business law, corporate
formation and structure, commercial transactions, and real estate. Conveniently
located in St. Louis, Missouri, we serve national and local clients in Missouri
and Illinois. Please visit us at www.westminsterlegalgroup.com.
The choice of a lawyer is an important decision and should
not be based solely upon advertisements. This disclosure is required by the
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