Consumer Contracts and E-commerce

Strong European consumer protection laws ensure that customers purchasing goods and services online in a private capacity - consumers -  are well protected. This article looks at consumer contracts in e-commerce

In the UK The E-commerce Regulations 2002 apply to businesses that sell goods or services to businesses or consumers on the internet, or by email or Short Message Service (SMS), ie text messages; advertise on the internet, or by email or SMS; convey or store electronic content for customers, or provide access to a communications network

They do not cover direct marketing by phone or fax.

The regulations specify information you must give to customers when you sell online.

The regulations also provide guidelines on advertising and promotions. "Commercial communications" must:

  • be clearly recognisable as such
  • say on whose behalf they are sent
  • clearly identify promotional offers and any qualifying conditions

The regulations also cover "unsolicited commercial communications", commonly referred to as spam.

Providing consumers with clear information

Consumer contractsAll businesses that supply goods or services must comply with a wide range of regulations on their quality and suitability as well as rules on the information they must provide.

But there are a number of extra rules if you sell at a distance or online. This includes selling via the internet, phone, fax, and digital TV or by mail order including catalogues.

Understanding and complying with the distance selling regulations puts you on a firm footing when dealing with consumers, and can help you to avoid disputes.

This guide gives an overview of the rules on distance selling and online trading and tells you where you can find out more.

Businesses that sell products or services at a distance must comply with the Distance Selling Regulations. If you sell or market online - over the internet, by email, on interactive television or using SMS messages - you must also comply with the Electronic Commerce Regulations.

If you sell services to customers based in the UK and the rest of the European Economic Area (EEA), you must also follow The Provision of Services Regulations.

Before an order is placed

Businesses that sell to consumers using distance-selling methods must give clear and comprehensible 'prior information' before an order is placed.

You must set out:

  • your business name and geographic address (when advance payment is required)
  • a description of the goods or services
  • prices, including all taxes
  • delivery arrangements, costs and date - within 30 days of the order if not specified
  • payment arrangements
  • cancellation rights and details of who bears the cost of returning cancelled goods
  • how long prices remain valid
  • the minimum duration of contracts
  • if you want to offer substitute goods if those ordered aren't available - if you do, you must meet the costs if the replacement goods are returned

If you are selling online, you must also:

  • give your email address and VAT number - if applicable
  • give details of trade associations, professional bodies or authorisation schemes the business belongs to
  • give a list of the steps involved in completing a sale contract
  • acknowledge receipt of orders electronically and promptly
  • make sure customers can store and reproduce your terms and conditions, for example by downloading onto their own computer and printing them off
  • make it easy for customers to check orders and correct errors before they complete the order
  • tell customers which language options are available to complete an order

Once a sale is made

Unless the information has already been provided in written form - e.g. an advertisement or brochure - you must confirm it in writing, when the goods are delivered or before the service comes to an end. You must also state:

  • how and when the consumer can cancel the order
  • your address
  • any guarantees or after-sales services that apply

The consumer can cancel the agreement up to seven days after the goods are delivered or the service contract is agreed. Special rules apply if the written information has not been provided, or if the consumer agrees to the service starting before this cooling-off period is over.

Once an online sale is completed, you should tell the customer if you are keeping a copy of the contract details and whether they can see it.

There are some exceptions to the distance selling regulations, such as financial services and food and drink delivered by a 'regular roundsman' - eg a milkman.

Selling services to the UK and the EEA: additional requirements

If you are providing services to UK and EEA businesses or consumers you must provide additional information to your customers including:

  • your legal status and form
  • details of any UK or EEA authorisation schemes or professional and regulatory bodies you are regulated by or must belong to (if applicable)
  • details of any trade or other similar public registration and your registration number (if applicable)
  • details of any terms, conditions and after-sales guarantees
  • details of any professional indemnity insurance you hold and contact details for the insurance company (if applicable)

Further information

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