With the supply and purchase of products and services made over the Internet suppliers should provide standard terms and conditions of sale to cover a variety of legal issues setting and to set out the boundaries for the contractual relationship.
Before placing an order online the customer must be given the opportunity to read, accept, store and download an organisation’s business terms and conditions set out on its website. Make it easy for customers to scroll through the terms and conditions and ensure that they are incorporated at the time the contract is concluded. Click-wrap agreements - made by pointing and clicking online to indicate acceptance - are a good idea.
All information regarding costs, taxes, delivery charges and other fees associated with any supply of goods and services must be readily accessible and prominently displayed before completion of purchase.
Even where the web site is simply used as an advertising tool, it is still advisable to set out website terms and conditions of use.
Specific considerations to address
- A statement that the sale of goods and/or services is governed by the terms and conditions of sale and that the user can only place an order if they accept them;
- A statement that the organisation is not itself a legal offer to sell the products or supply the services but merely inviting the buyer to make a legal offer to purchase (an ‘invitation to treat’) which the seller may or may not choose to accept;
- Any relevant and/or appropriate statements regarding the availability of the products and services being described on the website (e.g. in which countries they are available and unavailable for sale);
- Appropriate warranties, representations and conditions regarding the products and/or services (excluding all others, whether express or implied);
- Appropriate indemnities from the website owner (or supplier) of the products and/or services (where applicable) and/or from the user in respect of the products’ and/or services’ use (if applicable);
- Appropriate exclusions and/or limitations of liability of the website owner and/or supplier of the products and/or services (as applicable) and/or of the user (if applicable);
- A statement that the terms and conditions are governed by English law and that the purchase submits to the jurisdiction of the English Courts.
The organisation should obtain legal advice on the impact of any mandatory or other local law applicable to the terms and conditions of sale in all countries in which the products and/or services are offered for sale outside the UK.
Upon receipt of the customer’s order, confirmation of this receipt should be sent to the customer by email (or telephone if required) without delay.
Once the contract has been formed, take a note of the date and time when the contract was made. If contracts are made using email as a communications medium, take extra care specifying how and when the contract was formed. If a customer never receives the email with the supplier’s acceptance of the offer, the contract may be deemed invalid.
Consumers also have special requirements set down in The Consumer Protection (Distance Selling) Regulations 2000 (the 'Distance Selling' Regulations).
Summary of essential terms and conditions
Any terms and conditions that you use should be tailored to the needs of your business, and include:
- Description of goods or services being supplied;
- Price and payment structure;
- Delivery details, including the time, place & person who is responsible for delivery;
- Rights of either party to terminate the contract;
- Limitation of liability provisions;
- Confidentiality provisions, particularly if the contract is of a sensitive nature;
- Confirmation of which country's courts and laws applies to the contract;
Limitation of liability clauses
- Clauses limiting one or both parties' liability are usually the most contentious.
- There are restrictions on the ability of businesses to limit their liability.
- Generally, limitation of liability clauses need to be reasonable in order to be enforceable.
- There are stricter rules for businesses dealing with consumers, so that it is more difficult for businesses to impose exclusion of liability clauses.
- For some businesses dealing with both consumers and other business customers, it is usually better to have two sets of terms and conditions, one for each.