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Do you sell online? Are your website sales terms compliant?

Posted
July 9, 2015
Business Law

By Paul Dungate, Head of Business Law at stevensdrake We often get asked to update or draft ‘website terms of sale’ for SME businesses and clients are often surprised with the extent of the customer’s rights. Clients also ask that their liability is excluded for a host of matters. Our replies may not always be welcome because a trader can only do so much and, of course it “depends on the circumstances”; and if you are selling to a consumer (that is, not someone who is buying as part of their business activity) then you need to be aware that special rules apply. The applicable law to this area includes the Unfair Terms In Consumer Contracts Regulations, the Sales of Goods and Services Acts, E-Commerce Regulations and the Consumer Contracts Regulations…don’t be fooled into thinking this is straightforward. In short, in a contract with a consumer, a clause minimising liability or one which is not easily understandable (for example, excluding liability for consequential loss) may be deemed unfair and not enforceable by a Court. A Court will look at such things like: is the language understandable? what is the bargaining positions of the parties (that is, can the consumer negotiate with the seller)? and the availability of insurance to each party for the goods and services. Most traders know about the Sale of Goods and Services provisions, some of which cannot be excluded when selling to a consumer. So, goods sold need to be of reasonable quality, fit for purpose, comply with their description etc. Further tailoring of interpretation and the extent to which these apply, can be given to goods which are specifically made to order. Most traders know about the Sale of Goods and Services provisions, some of which cannot be excluded when selling to a consumer. So, goods sold need to be of reasonable quality, fit for purpose, comply with their description etc. Further tailoring of interpretation and the extent to which these apply, can be given to goods which are specifically made to order. This and other information must be clearly set out in straightforward language. Customers need to be able to store and reproduce the order and the terms. If you sell online you should be familiar with the point in time of the transaction when a customer ‘accepts’ purchasing the goods and your standard terms. So, for it to be a contract, all these things have to comply with the law and all be agreed (and demonstrably so, hence check clear boxes to accept terms and conditions and be able to save them before the customer hits the ‘Proceed’ button, and making it clear that the customer then has an obligation to pay). The order has to be acknowledged straightaway and the customer needs to be able to identify, and correct, any errors that were made when placing the order. On top of all that, the Consumer Contracts Regulations include further information details to be set out such as:

  • The price including taxes, delivery cost (or if not fully ascertainable at that time, additional costs that will be payable)
  • The seller’s complaints handling policy
  • Details of the customer’s rights to cancel including timings
  • That the customer bears the costs of return of the goods if they cancel
  • That if they can’t be returned by post, what the cost of return is
  • The right of the customer to cancel (generally, there are exceptions like bespoke goods) for any reason within 14 days after the date the contract is entered into or after the customer has physical possession of the goods (this can be extended if a seller does not provide all the required information)
  • If the contract is for the provision of services, then if the services are fully performed the right is cancelled.

So, selling online has great benefits but a seller must comply with the rules and their terms and conditions need to contain all the right information. The customer has 14 days to return the goods and the seller has to accept this. And a seller’s liability is really only limited to the extent the law states, meaning a seller cannot limit it to the extent they want and only limited restrictions on the seller’s liability will stand up to scrutiny. If you are a seller, you should review and update your website selling terms and conditions and order processing regularly. We at stevensdrake can help you tailor them to comply and where possible, limit your exposure. Call Paul Dungate on 01293 596981 This article is provided for general information only. Please do not make any decision on the basis of this article alone without taking specific advice from us. stevensdrake will only be responsible for the advice we give which is specific to you.

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