Are you blindly believing that the developer you chose to create your E-Commerce site is aware of best practice and UK laws regarding E-Commerce guidelines?. As the owner of an E-Commerce store, you need to be aware of guidelines regarding online sales.
In UK law some elements must be applied in online contracts for them to be legally binding. They include an offer, a consideration, an acceptance and an intention to form a legal relationship. The same rules that are applied in the formation of contracts physically are applied in online contracts.
E-commerce guidelines are intended to make sure that online contracts are legally binding and enforceable every where in Europe.
UPDATE to E-Commerce Guidelines
The new Consumer Rights Act 2015 becomes law on Thursday 1 October 2015.
The updates to the Consumer Rights Act aims to avoid disputes between sellers and consumers, and ensure both have the confidence to buy and sell online.
These rights includes:
After 30 days, they are allowed to claim a replacement or repair. If this isn’t available or applicable, or the repair is unsuccessful or is not performed within a reasonable amount of time, they can request a price reduction, or still reject the goods.
If these services are not up to standard, the consumer can make you repeat the service, or claim a price reduction. Otherwise, customers may be able to claim compensation for any losses which are incurred.
Update your website, or marketing material with the new information, and update your sales team on what the new regulations means for their correspondence with consumers.
If you have written material or conversations with your team, you will be bound by what is said or written, without taking your terms & conditions into account. Any written or spoken material must include the quotes, timescales, or the results to be achieved.
Formation of Online E-Commerce Contract
If you allow your customers to place orders online, you should ensure that your terms and conditions regarding contracts are clearly stipulated on your website and can be downloaded. For online contract to be legally binding, it should;
- Offer – One party must offer a contract to the other
- Acceptance – The other party must accept the offer
- Intention to form legal relations – Both parties must intend to make the contract legally binding
- Consideration – In Northern Ireland and England there must be something being exchanged. You should note that there is no general requirement for contracts to be in writing or for the parties to actually sign a contract.
Crucial Terms of an Online Contract
Generally any online contract for services or goods must address:
- the description of services offered or goods being supplied
- the payment and price structure
- the delivery details like time, place and names persons responsible for the delivery
- the rights of any party to pull out of the contract
- limitation of legal liability provisions
- confidentiality provisions
- confirmation of the specific country’s laws applied in the contract.
Considerations in Online Selling
Generally, the regulations are designed to protect the client’s rights in e-commerce.
- Contract formation – Make sure that terms and conditions are displayed on your website for your customers to read
- Consumer Contracts Regulations 2013 – Ensure that you strictly comply with the legislation regarding your kind of electronic contract
- Data Protection Act – Comply with legislation that impose conditions on controllers and data processors
- Intellectual property – Consider copyright and trademark rights
- Consumer protection legislation – All the legislation regarding unfair contracting on traditional contracts equally apply to goods and services sold over the internet
- Security – Online selling will necessitate the submission of sensitive information and payment instructions. Online vendors could be answerable for security breaches on their websites
- Excluded goods – Some types of goods or services which are legitimate in one jurisdiction may be proscribed in other jurisdictions
- Specific regulation – Specific industries are regulated particularly the ones with premium-rate sites or ones targeting children
- Access agreement – It is a requirement that you display terms and conditions regarding your website usage.
Consumers in the European Union benefit from a range of rules and regulations regarding sales and services contracted remotely or face to face.
Selling Goods to Consumers
The EU has set a minimum level of customer protection for the online purchase of goods or services in its market. The policies stipulate that the seller must supply goods that conform with their trade description, match the samples or models quality, exhibit the same qualities and performance capacity of such goods and be fit for all purpose stipulated by the supplier. Consumers have 2 years from the date of delivery to seek legal redress for discrepancies present at time of delivery of goods which were to last for that period of time.
The Consumer Contracts Regulations 2013 is applicable to most online contracts between purchaser and supplier. This is binding even when both parties are not physically present at the same time or in the same location. This applies to e-mails, internet agreements, media adverts, contracts made through fax or telephone and mail order catalogues. In the legislation the consumer has 14 working days to terminate the contract if need be.
Retail financial services offered remotely are regulated by the DSDFS. The financial services under this jurisdiction are banking, insurance, payment services and investment. Purchasers entitled to information regarding the service they are paying for. They have a grace period of 30 days depending with individual state laws relating to the particular electronic financial service. The right of withdrawal is not binding to financial services which involve speculation. The services include; foreign exchange, transferable securities, futures, collective investment schemes, interest and exchange rates.
Resolving Online Legal Disputes
When an online contract is sealed, disagreements may arise. If the parties to the contract are from different jurisdictions, they must establish what law to apply and which courts have jurisdiction to resolve the dispute. There are considerable exceptions in favor of online consumers. However, you should know that this is a complex matter and hence you should promptly seek legal advice to solve it.
European Union Jurisdiction
While within the European Economic Area, disputing parties can choose the law and the forum to use in their dispute resolution. However, the Rome Convention rules can decide which law is to be applied although some mandatory rules in a consumer’s country can be prioritized. Likewise, in the EU power of disputes is controlled by the Brussels Regulation. If the disputing parties fail to agree on a particular jurisdiction, the overriding rule is that the defendant are sued in their jurisdictions or where the contract was signed.
Consumer Protection Laws
Online consumers can invoke consumer protection laws in their jurisdiction or in the supplier’s jurisdiction, but are normally sued in their home states. Therefore online companies must be prepared to observe the consumer protection rules in all their markets.
E-commerce retailers should specify their terms and conditions as well as their jurisdictions to eliminate uncertainty in dispute resolutions. The English law is the most popular choice for the global trade and is normally chosen by disputing parties with no other relation to the UK.
Electronic signatures are as binding as written signatures in the UK. They provide guarantee that the signatories and authors of e-mails and electronic documents are who they declare to be. All parties in any electronic transaction or messaging need to be sure that the data they send arrive at their target destination without being altered. They might also need them to arrive at their destinations confidentially. Electronic signatures can:
- secure by use of encryption
- establish the origin of the message
- establish if a message has been distorted
- confirm that a message was successfully sent and at what precise time through stamping.
The Electronic Communications has clarified that electronic signatures can be admissible as evidence regarding the integrity and authenticity of any electronic transaction. There is an effective directive that has ensured the effectiveness of all electronic signatures within Europe.
How Electronic Signatures Work
Electronic signature can be stamped to all transaction recorded digitally. They include images, documents, e-mails as well as web pages. Standard software in the market includes the appropriate signature functions. You and your e-commerce partners will each require a digital certificate to encode all encrypted communications. The standard software packages provide robust security for encrypting and signing electronic files, instant messaging, web pages, additional options like message history management, multi-user signing as well as alteration checking.
Implementation of Electronic Signatures
For you to effectively implement an electronic signature, you should:
- understand your need and make sure that it is realistic
- realize the estimated total costs as well as the benefits
- identify the partners whom you intend to exchange signed documents with
- seek professional guidance and agree with your transacting partners or trading organizations
- experiment in free introductory software versions or at low cost
- offer staff familiarization and training where necessary
- motivate staff involvement
- monitor and assess the impact of the strategy on your business
In order for you to send encrypted documents to someone, you will first require critical information from them. Similarly, if a recipient wishes to verify an electronic signature, they have to possess some special information regarding the sender or the person who signed. This fundamental information is contained in the communicating party’s digital certificates. A digital certificate (TLS & SSL) operates like an electronic passport. You use it in verifying your identify as well as confirming your user rights to access encrypted electronic information or services. You can obtain the digital signature from various certifying authorities preferably one that is properly approved. These certifying organizations are popularly known as Trusted Third Parties.
The digital certificates are available for individuals as well as businesses. The approved versions are normally available on annual and monthly subscription and the charges depend with the number of signatures you need. You require a separate digital certificate for every e-mail account you need to send the digitally signed e-mails from. Digital certificates are also available online depending on the degree of security you require. The certificates should be e-mailed to you within 24 hours of submitting the required information to verify your identity.
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