Understanding E-commerce Law Regulations
For all website providers it is essential that websites address the following e-commerce law directives:
- Directive 97/7/EC on the protection of consumers in respect of distance contracts (Distance Selling Directive);
- Directive 2000/31/EC on certain legal aspects of information society services (E-commerce Directive), which both include information requirements with which website operators have to comply.
In the UK the corresponding e-commerce regulations legislation is:
- The Consumer Protection (Distance Selling) Regulations 2000 (SI 2000/2334) (Distance Selling Regulations); and
- The Electronic Commerce (EC Directive) Regulations 2002 (SI 2002/2013) (E-commerce Regulations).
Are there special rules relating to online contract formation?
The simple answer is no. The traditional methods apply namely;
For a contract to be valid under English law there must be:
- An offer by one party;
- Communication of acceptance of that offer by the other party;
- Consideration (for example, the payment of money);
- An intention by the parties to be legally bound.
However, differences do apply and certain technical requirements must be followed when forming online business-to-consumer or business-to-business contracts.
For example under regulations 9 and 11, Electronic Commerce (EC Directive Regulations 2002), the supplier must provide the customer with the following information (if not there will be no valid contract):
- The different technical steps to follow to conclude the contract (not required for contracts formed by e-mail);
- Whether or not the contract will be filed by the supplier or a third party (not required for contracts formed by e-mail);
- The technical means for identifying and correcting input errors before placing an order;
- The languages offered for the conclusion of the contract;
Where the supplier provides the customer with terms and conditions applicable to the contract, they must be provided in a way that allows the customer to store and reproduce them. E-commerce regulations state that the supplier must also acknowledge receipt of a customer's order without undue delay (although this is not required for contracts formed by e-mail).
Distance Selling
The Office of Fair Trading http://www.oft.gov.uk/ has key information for online retailers. (OFT958 - PDF Document OFT958)
The website recommends that businesses should undertake their own assessments to ensure they are complying with relevant E-Commerce law.
That's where we come in!
The following information is required from a website owner (courtesy of the OFT):
1. Contact Details
As a minimum standard, for compliance with the e-commerce regulations an online business should clearly provide:
- A name and address (not a Post Office Box);
- An email address (not simply a web form);
- Your VAT number (if applicable);
- (If you are a company) the place of registration, registered office address and registration number;
- Membership details, including the registration number, of any trade or professional association you belong to.
2. Clarity of Pricing Information and Other Charges
- Prices should be presented clearly and unambiguously. You should make clear the full price consumers will have to pay for the product, including tax, delivery and other charges;
- Where you cannot specify the final price in advance, (e.g. variable delivery rates) you should indicate clearly that additional charges may apply and how they will be included;
- You should provide clear information on payment options, together with details of any relevant surcharges (e.g.: credit card surcharges).
3. Delivery
- You may generally not include standard terms requiring your customers to bear the cost of insurance pending delivery;
- The goods should be delivered within 30 days unless you have agreed to a different period with your customer.
4. Cancellation Rights and Returns
- Unless cancellation rights under the Distance Selling Regulations (DSRs) do not apply, you must provide clear information on cancellation rights and how customers can cancel and order. Generally consumers have a minimum of seven working days commencing the day following delivery to exercise cancellation rights;
- If your customer wishes to cancel the order, they must take reasonable care of the product while in their possession;
- You may set out what you consider to be reasonable care but you may not impose conditions which prevent your customers from exercising their right reasonably to examine the goods. Typical conditions which may breach consumers’ rights include requirements that goods are returned unopened (except in the case of sealed software or audio/video recordings), "as new" or "in their original packaging";
- If the customer cancels an order under the DSRs, you may not deduct from the refund the costs of outward delivery nor other fees, such as an administration or restocking fee. The refund should be made as quickly as possible and within a maximum of 30 days;
- If you wish to require your customer to return the goods in the event of cancellation and to pay for the cost of doing so, you must make this clear in your e-commerce terms and conditions and confirm it in writing or another durable medium.
More information about the e-ecommerce law requirements are set out by the Office of Fair Trading can be found in the OFT guidance on Distance Selling Regulations (OFT 698) at www.oft.gov.uk/.
