A website presence is a fundamental tool for an expanding business, whether just for advertising or for providing an online sales channel.
An alluring website is the first step, but legal issues governing the operation of a website and sales from it cannot be overlooked. Appropriate terms and conditions are not only an essential legal requirement, but a vital means of gaining customer confidence and building a credible brand.
Be aware of the legal regime
Any organisation advertising or trading on the internet, whether a fledgling business or an established operation expanding its e-commerce presence, is subject to a panoply of laws. Most of these already apply to the traditional retailer, but there are many additional provisions which apply to online operators and others trading at a distance which can trip up the unwary trader and create avoidable problems.
Governments of EU member states decided during the infancy of the internet that appropriate EU-wide legal provisions should be implemented to foster confidence in internet commerce and to gain consumers' trust when they are not dealing face-to-face with suppliers.
"Why can't I just use my usual business terms and conditions on my website?"
A canny supplier may be able to recycle his normal trading terms and conditions for online use. Even well-drafted 'offline' terms and conditions will need certain changes and additions to bring them into line with the rules for website contracts.
All sole traders, partnerships, companies and other legal entities must disclose certain key details, such as postal or trading addresses, email address(es), VAT registration number, a company's country of registration and its registered number. There are special rules where the supplier of goods or services is a member of a regulated profession or industry or a member of a trade body.
Accordingly, laws specifically regulating e-commerce will mean significant 'topping and tailing' of traditional terms and conditions to ensure legal compliance (see below).
"What do I need in my website terms and conditions?"
There are various laws which specifically affect internet trading. As well as the normal provisions in sales contracts relating to the price and payment provisions, restrictions of the supplier's liability and other standard 'boilerplate' clauses, there are special requirements for e-commerce contracts.
For example, the customer must be told whether the price includes VAT and delivery costs and how and exactly when the online contract is made. A prudent trader must ensure that the 'offer' and 'acceptance' stages of a binding contract are carefully managed. The supplier needs to ensure that he is the one confirming acceptance of the contract, so that he is not in breach of that contract if he has insufficient stock or has inadvertently advertised the product at the wrong price.
It is also necessary, under the 'Distance Selling Regulations', to notify consumers (someone not buying in the course of a business) of their right to cancel an online contract and obtain a full refund of any money paid, even if the goods are not faulty. There are precise rules on cancellation and the required notices, but consumers must be told that they have at least 7 working days (excluding weekends and bank holidays) after delivery to return the goods, even if they are not defective. There are exceptions for certain goods, such as bespoke or perishable items.
As well as addressing the supply of goods and/or services, the terms and conditions must also deal with the ownership, use and availability of the website itself, prohibit spamming and unsuitable postings to interactive sites and assert intellectual property rights.
Anyone collecting customer names and other personal information online must comply with certain procedures concerning the collection, storage, use and transfer of that data under data protection law. A website privacy policy is, therefore, a must.
"But I've already got website terms and conditions"
No matter how good the website terms and conditions may be, if insufficient steps have been taken to draw them to customers' attention before the contract is made, they will not be 'incorporated' into the contract with the customer and they will not be legally binding. You must therefore expressly draw your terms and conditions to the customer's attention before the contract is concluded.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
