Online terms and conditions - business to consumer - sale of goods contract

Having your own website and selling your goods or services over the Internet is a “must” for many businesses. Even though it’s a different medium for doing business, it’s still vital to have terms and conditions in place. Use our model contract to set yourself up as an e-trader.

Make sure it sticks

The same rules apply to online contracts as to any other type of contract, i.e. if you want to rely on your terms and conditions, the user has to be made aware of them before the deal is made.

Who’s offering to whom?

It’s important to get this right, otherwise you could find yourself bound by a contract that you can’t honour. To achieve this you’ll need to recreate the shop scenario, i.e. the customer makes the offer and the shop has the option of deciding whether or not accept it.

To create a virtual shop window, make sure that your terms and conditions make it very clear that you always have the last word, e.g. acceptance of your offer will only take place on despatch of the goods. In addition, reserve the right to sell goods only if you have sufficient stock to meet demand.

Caution

If you’re going to sell goods to consumers (customers who are not buying goods in the course of their business), then beware at all times of various regulations and statutes that your site must comply with. The most important are:

•                     the Sale of Goods Act - sets out minimum standards that goods must meet, e.g. fitness for purpose, satisfactory quality; only applies to business-to-business contracts

•                     the Distance Selling Regulations - give customers the right to change their mind

•                     the Consumer Rights Act - sets out the minimum standards for goods sold and services supplied and it introduces tiered rights for consumers who are sold non-conforming goods as well as stipulating terms and conditions must be fair, written in plain English and not weighed unfairly in favour of the seller/supplier

•                     the Data Protection Act - personal data must be fairly processed and certain information must be provided to the data subject (this can all be dealt with by a well drafted Privacy Statement)

•                     the Electronic Commerce Regulations - state that information when selling online must be given in a clear and unambiguous manner about the technical steps to complete a contract, prices must be clearly stated, details must be given about the supplier, e.g. name and address and e-mail address, any orders must be acknowledged without undue delay and there must be available to the user of the site the ability to identify and correct any errors prior to the placing of their order.

Where will your customers be?

It’s easy to overlook the fact that anyone, anywhere can access your site. This could cause a problem when it comes to payment and delivery. It’s sensible to limit the area in which you’re prepared to send or deliver goods to.

To avoid the possibility of having to either bring or defend a claim in a foreign court, it’s sensible to consider limiting the ability to purchase your goods to UK citizens only.

Excluding liability

When you’re dealing with consumers your options are severely limited. You can’t exclude liability for faulty goods and excluding liability for anything else (except death and personal injury) must pass a fairness and reasonableness test.

Online dispute resolution

Since 9 July 2015 all traders selling to consumers have access to a certified provider of alternative dispute resolution (ADR) services in their sector. Certification of ADR providers ensures quality and consistency of standards across ADR services. ADR will often be free to consumers, though ADR providers retain the flexibility to charge consumers a nominal fee.

Since 1 October 2015 all traders selling to consumers, whether or not they intend to use ADR, need to:

• give the consumer details of a certified ADR provider; and
• inform the consumer about whether they intend to use that provider.

Since 15 February 2016 all online traders and online marketplaces must include a link on their website to the online dispute resolution platform, irrespective of whether you currently market your products or services to consumers in other member states. For those committed to an ADR scheme, this will be in addition to giving details, on your website, of the certified ADR provider serving your sector.