E-commerce regulations and online contracts

The regulations

The main regulations for the sale of goods or services using the Internet are:

The regulations are designed to protect the consumer. They spell out the information that you should display on your web site, the contract process and your customers’ rights.

Bear in mind when you are developing your web site:

Who the regulations apply to. Strictly speaking, they are for people in the European Union only. But these laws are leading the way globally and best practice is for all sites to comply.
Sectors which are exempt (but which may have their own regulations). These are:

financial services
sale of land or buildings
auctions
business-to-business transactions

Required information

All web sites must show:

name, postal address and email address of the web site owner
company registration number, if you have one
company VAT number, if you have one (even if it is not an e-commerce site)
membership details and registration number of your trade or professional association (if any), with a link to any online professional rules
clear and unambiguous pricing, showing if VAT is included and any delivery costs
main features of the goods or services
cost of phone calls, if a premium rate number is used

All these details need to be ‘easily, directly and permanently accessible’, probably in your ‘About us’ or ‘Legal information’ pages.

E-commerce sites must include extra information for customers, before they place orders. They must show:

how to identify and correct any errors (for example, how to update quantities of products or clear information without cancelling the order)
the ‘technical steps’ involved (usually by highlighting the checkout progress at the top of each page)
the point where the contract is formed (make this clear in ‘terms and conditions’)
terms and conditions, in a printable format
details of the customer’s statutory seven working day cancellation period
any time limit for the offer (how long the price is valid)
minimum duration of the contract, if you are providing goods or services continuously (for example, for a mobile phone tariff)

Email a prompt acknowledgement when the customer has placed the order. This does not need to form a binding contract, but should tell the customer what will happen to conclude the contract. The customer should be able to print out an ‘order summary’ page and email confirmation.

The acknowledgement should inform the customer about:

the right to cancel
how to cancel, including who and where to send the cancellation notice
who pays for the return of goods (customer or supplier) when cancelling
the supplier’s postal address
any exception to cancellation rights
after-sales services or guarantees
the conditions for cancelling a contract of more than a year or with no fixed date for ending

Cancellation

‘Cooling off’ period
The Distance Selling Regulations provide for a mandatory cancellation period when the customer can withdraw from the contract (a ‘cooling off’ period). This is seven working days, beginning on the day after the goods are delivered.

If the customer decides to cancel the contract during the cooling off period, they should do so in writing or by email.

The contract that has been cancelled must be treated as if it had never been entered into. Any money already paid by the customer must be returned, including delivery and taxes. The customer must make the goods available for collection, although the terms and conditions can specify that the customer must return the goods.
Exceptions to the cooling off period

Services agreed to begin before the end of the cooling off period.
Goods made to the customer’s specification.
Goods that cannot be returned.
Perishable goods.
CD, DVD, tapes with software, audio or video if unsealed.
Newspapers, periodicals and magazines.
Betting, gaming and lotteries.

Terms and conditions

Every web site should have some terms and conditions, even if it does not involve any business transactions.

Terms and conditions of sale
If a web site sells goods or services, the terms and conditions must take account of the E-commerce and Distance Selling Regulations, as well as any other relevant consumer protection laws.

The terms should be part of the sales process, shown on screen before the customer places an order. The customer should have to click an ‘accept’ or ‘agree’ button at the bottom of the page before they can continue.

Disclaimers and intellectual property notices
Terms and conditions help web site visitors to understand the basis on which they access the site. They also meet many of the obligations for disclosure of information. The terms should be available from the home page, and if possible from every other page in the web site, too.

The content will vary, but should include:

Disclaimer about content: ‘the provider is not liable for any use of the web site or reliance on the content, except where the site owner is negligent’.
Disclaimer about availability: ‘the provider is not liable if the web site is unavailable for any reason’.
Intellectual property and the right to take a copy. It is important to show who owns the copyright for the content, but you should allow users to take copies for limited purposes (for example, to print a copy for non-commercial uses).
Details about posting comments to the site. For example, discussion forum visitors should have to read specific terms and conditions before they can post their comments. These terms should include:
- what is allowed and not allowed in the area
- whether the area is monitored
- site owner’s non-liability for comments posted by third parties

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