The Liberty Alliance Project has published a document outlining the legal issues enterprises should consider when networking their web applications and identity systems with those of other businesses.

The primer on creating circles of trust raises awareness around issues such as privacy, technical terminology, indemnification and dispute resolution, the organisation said.

The Liberty Alliance, composed of vendors such as Oracle, Sun and IBM, has worked on defining technical protocols used for federated identity and web applications. It's now studying policy issues around the use of federated identity technology.

While vendors are now producing standards-based products that enable the secure sharing of information, the legal consequences of what happens if things go wrong aren't so well defined. Before linking their systems, two businesses have to create a contract, a process Liberty calls establishing a "Circle of Trust."

Since managing federation agreeements between businesses is still a new area "it's helpful to have a checklist," said Graham Titterington, principal analyst at Ovum. "It's a step forward."

The document was written by Liberty's Public Policy Expert Group along with legal experts, the organisation said.