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Back-to-basics - A guide to website terms and conditions

Are you confident that your website fulfils all the legal requirements relating to e-commerce, data protection and privacy? Lyndsay Gough provides a back-to-basics guide to your legal obligations.

Creating an alluring website is a fundamental first step for most businesses, especially ones trading online. Legal issues governing that website and sales from it cannot be overlooked and appropriate terms and conditions are not only an essential legal requirement, but a vital means of gaining customer confidence and building a credible brand.

Online businesses are subject to the panoply of laws which already apply to the traditional retailer, as well as many additional provisions which apply to online operators and which can trip up the unwary trader. These include the Electronic Commerce (EC Directive) Regulations 2002 and the Consumer Protection (Distance Selling) Regulations 2000 (Distance Selling Regulations).

What legal documents do I need on my website?

There are three key legal documents:

Can I use our usual business terms on the website?

A canny supplier may be able to recycle his normal trading terms for online use, but even well-drafted 'offline' terms will need tailoring to comply with the additional rules for website contracts.

For example, all sole traders, partnerships, companies and other legal entities must disclose certain key details, such as trading address, email address, VAT registration number, a company's country of registration and its registered number. There are special rules where the supplier is a member of a regulated profession or industry or a member of a trade body.

What is needed in the website terms and conditions?

There are special rules for e-commerce contracts. For example, the customer must be told whether the price includes VAT and delivery costs and exactly how and when the online contract is made.

It is also necessary under the Distance Selling Regulations to notify consumers of their right to cancel an online contract and obtain a full refund of any money paid, even if the goods are not faulty. A 'consumer' is generally someone who is not buying on behalf of a business.

There are precise rules on cancellation and the required notices, but consumers must be told that they have at least 7 working days after delivery to return the goods, even if they are not defective. There are exceptions for certain goods, such as bespoke or perishable items.

Are your website terms and conditions visible enough?

No matter how good the website terms and conditions may be, if insufficient steps have been taken to draw them to the customer's attention before the contract is made, they will not be 'incorporated' into the contract and they will not be legally binding.

Customers should first be directed to the relevant terms and conditions and privacy policy. This could be achieved via hyperlinks to the documents or a requirement to scroll through them. The customer should then be required to click on an 'Accept' button confirming that they agree to and accept the website terms, before being permitted to place an order.

What are the penalties for getting it wrong?

The Office of Fair Trading and certain other consumer protection bodies can apply to courts for enforcement orders, called 'stop now orders', to prevent suppliers from infringing relevant consumer protection legislation.

Failure to comply with privacy laws can sometimes lead to criminal sanctions with company directors potentially facing personal liability.

For further information please contact:

This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.

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