1. Introduction

E-commerce lets you reach a maximum number of customers at a minimum cost. Your online presence potentially gives you a global customer base. But before you get up and running there are a few basic rules and regulations that you should be aware of. The Internet is a great opportunity to reach more customers, increase sales and extend your presence. Briffa are here to help you achieve all your on-line business goals. If you run a business, which supplies goods or services to consumers on-line via the Internet, there are a few rules you need to know and we will guide you through them all. So start here and start selling!

2. What Terms Should I Put on My Website?

The information that you should supply to your customers can be divided out into three main areas. That is (a) general terms and information, which should be constantly available on your website; (b) terms which should be supplied when a customer places an order; and (c) the information given to consumers when the order has been completed.

(a) Information given to Consumers Prior to Making a Contract

If you are operating a website and selling goods or services on-line to consumers, you should make sure that the following information is on your website permanently available, easy to access and prior to the finalisation of a contract:

• The identity of the supplier, the supplier�s address, and current e-mail address from which the supplier can be contacted;
• A description of the main characteristics of the goods or services;
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• The price of the goods or services must be indicated clearly and unambiguously and, in particular, must indicate whether they are inclusive of tax and delivery costs;
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• The arrangements for payment, delivery or performance;
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• If the supplier is registered with a trade body, his or her registration details
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• Where the supplier is subject to a regulatory body, particulars of that regulatory body;
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• The VAT number of the supplier;
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• The existence of a right of cancellation;
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• The cost of using the means of distance communication where it is calculated other than at the basic rate;
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• Any after sale services and guarantees provided;
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• The period for which the offer or the price remains valid; and
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• Where appropriate, the minimum duration of the contract, in the case of contracts for the supply of goods or services to be performed permanently or recurrently;

(b) Information Prior to the Order Being Made

The following information must be given to consumers clearly, comprehensibly and unambiguously and prior to the order being placed by the consumer:-

• The different technical steps to follow to conclude the contract;
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• Whether or not the service provider will file the concluded contract, and whether it will be accessible;
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• The technical means for identifying and correcting input errors prior to the placing of the order;
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• The languages offered for the conclusion of the contract; and
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• If the service provider is subject to any voluntary codes, then the service provider must provide information on how these codes can be consulted on-line.

Contract terms and general conditions must be made available in such a way that the recipient can store and reproduce them. This will generally mean that the recipient should be able to save the terms and conditions onto their computer.

(c) Steps to Take when the Consumer has placed the Order

Once a consumer places an order on your website, you then have to ensure that you acknowledge receipt of the order without undue delay and by electronic means. The order and the acknowledgement are deemed to be received when the parties to whom they are addressed are able access them.

3. Are There Special Rules Which Govern Cancelling Contracts?

Yes there are. You have to provide on your website information about the procedures for cancelling. So for example, if you require your customers to return the goods to you in the event of cancellation you should notify them of this. Also if your customer has to bear the costs of this, then you must also inform them of this.

If you have fully informed your customers of all the terms which are required by law, and the procedures for cancelling, then generally consumers will have the right to cancel their orders with you seven working days after receipt of the goods from you. There are certain exceptions to this: -

(a) If you are providing services on-line and you commence providing your service and your customer has agreed to this, then the customer cannot pull out of the contract;

(b) The seven working day rule doesn�t apply to:

• Contracts for goods or services where the price depends on fluctuations in the financial market;
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• Goods supplied to the customer�s specification; clearly personalised or are liable to deteriorate rapidly;
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• Audio or video recordings or computer software if they are unsealed by the consumer;
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• Newspapers, periodicals and magazines;
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• Gaming, betting and lottery services.

You must also inform the consumer:

If you propose, in the event of the goods or services ordered by the consumer being unavailable, to provide substitute goods or services (as the case may be) of equivalent quality and price; and

That the cost of returning any such substitute goods to the supplier in the event of cancellation by the consumer will be met by you, the supplier.

4. What about Promotional Offers On-Line?

If you are advertising, offering discounts, running promotional offers or games on a website, then it must be clear from the website that this is a promotion. The person who runs the promotion must be identified and the rules relating to qualifying for offers or games must be clear and unambiguous.

5. Are there any Implied Terms in my Contracts with Consumers?

If you are in business and selling goods to consumers on-line, then the following implied conditions arise, which you cannot restrict or exclude:

When selling goods to a consumer there is an implied condition that you are the owner of those goods.

Where the goods are being sold by description, there is an implied term that the goods will correspond with the description;

There is an implied term that the goods supplied are of satisfactory quality. Goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price and all relevant circumstances. The following are aspects of the quality of goods:

• The fitness for purpose;
• Appearance and finish;
• Freedom from minor defects;
• Safety; and
• Durability

You can only exclude yourself from your own negligence if such restriction is reasonable. Similarly if you breach a contract when you are dealing with a consumer, you can only restrict your loss if such restriction is reasonable.

6. Special Rules about Standard Terms

If you are selling goods or services to a consumer on the basis of standard terms it is important that the terms of that contract are fair. Terms in contracts with consumers must be intelligible and be in plain language. Any unfair term is not binding on the consumer.

Generally a term will be unfair if it creates a significant imbalance in the rights and obligations of the parties. The type of clauses that would be unfair would be where you excluded the rights of a consumer if you didn�t perform the contract; making the consumer who doesn�t fulfil his side of the bargain pay very high compensation; having a right to terminate without notice.

7. When Does the Contract Come Into Existence?

The law is unclear as to when the contract comes into existence. The best approach would be to spell this out on your website. For example,'a contract comes into existence when we receive your order and send you an e-mail confirmation'. It would also be useful to say that English law covers any contracts made on your site, so as to bind foreign customers to English rules.

8. What Can Briffa do For Me?

As an efficient and cost effective firm, we can provide you with a plain English set of terms which will comply with the law, be specific to your business and get you up and running. We can look at your existing terms and see whether they are compliant and suggest amendments. We can also access your contract formation procedures and help you deliver confidence to your consumers so they will visit your site and purchase from you again and again.

For more information about on-line rules and consumer contracts, contact Alex Chapman on alex@briffa.com

About the author: Briffa is a modern legal practice specialising in intellectual property � the protection of copyright, designs, patents, trade marks, trade secrets and information technology. Our lawyers all have excellent legal backgrounds and are experts in this field. www.briffa.com