Social networking businesses have unique challenges to face when protecting themselves from liability. For example, they need to create terms of use for their service, protect intellectual property, and maximize statutory immunities.
End-User License Agreements (EULA or Terms of Use) are a concept we've all grown familiar with. Courts have ruled that users can be found legally culpable for infringing upon these contracts. On the opposite hand, however, if the contract is too demanding or one-sided, courts can refuse to enforce it. Creating these types of agreements is a tricky balance as a result.
Copyright violations have also affected social networks in the past. Before the Digital Millennium Copyright Act in 1998, service providers could be held to criminal sanctions and civil liability for hosting an infringing work. Now, social networks are protected if: there isn't knowledge of the work being infringing, lack of financial benefit, and expeditious removal of the content once it has been discovered.
The internet is always creating new legal issues, especially so in the realms of contracts and intellectual property. It's good sense for businesses to be aware of these problems.
For more information visit: Business Law Today.
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