Legal Query: Intermediary Liability and Third-Party Transaction Risks

832 votes

As an intermediary, ensure robust Seller Agreement, ToU & Privacy Policy. Clearly define SOW, payments, indemnity, termination & disputes. Absence may lead to liability and non-compliance with Indian data protection laws.

Advocate Keshav Agarwal LawRato

934 votes

Hi, Hope you are doing well. Yes, while you are not directly part of the transaction or payment flow, your platform may still be implicated in disputes—particularly under the Consumer Protection Act, 2019 and intermediary liability framework under the Information Technology Act, 2000. Much will turn on how your role is structured, the nature of representations made on the platform, and your compliance posture. With the right safeguards, exposure can be contained—but this typically requires careful calibration of terms, disclaimers, and platform conduct. Happy to examine your current structure more closely.

Advocate Devika Gupta LawRato

875 votes

While your platform is positioned as an intermediary and not directly involved in payments or execution of the sale contract, your liability will ultimately depend on how you present and operate the platform in practice. You may be exposed to legal risk if you showcase or promote any business or individual as “reliable”, “trusted”, or “verified”, especially where such representation influences a buyer’s decision to transact. In such situations, a court may view your role as going beyond that of a neutral facilitator and attribute responsibility on grounds of misrepresentation, negligence, or unfair trade practices. A critical factor will be whether you actually verify sellers before promoting them. If you claim or even imply that sellers are verified, you must have a consistent and documented due diligence process in place. Absence of such verification, coupled with promotional assurances, can significantly increase your exposure in cases of fraud or payment disputes. Therefore, it is advisable to avoid making credibility-based claims unless they are backed by real verification. Your terms of use should clearly state that you are only a facilitator and not a party to transactions. The more you actively endorse sellers, the higher your potential liability becomes.

Advocate Shubham Sharma LawRato