Most businesses now have an online presence, even if they do not directly trade over the internet. Our internet law solicitors can help your business comply with the legal aspects of this constantly changing environment.
If you sell goods over the internet, it is crucial that your business understands the legal implications trading online presents. Laws relating to selling goods and services online include:
- Data protection
- Electronically concluded contracts
- Distance selling
This means that additional consideration must be given to your presence on the internet and the potential legal consequences. Our commercial lawyers will take the time to understand the way you interact with customers online, so we can help you comply with legal obligations that will suit your business.
It is vital that you are aware of the common problems and pitfalls which arise when trading online, and a number of these are covered in our "Frequently Asked Questions" below.
If you would like help and advice, speak to a member of our commercial team today. We can help you wherever you are in the UK.
Frequently asked questions
How can I register and protect my domain name?
To make it easy for people to find your website, and minimise the risk of someone else using a similar domain name, some businesses register several domain names. For example, you might want to register yourname.co.uk and yourname.com, or even different versions of "yourname".
Registration itself is a fairly simple process, requiring the provision of various administrative details (e.g. who owns the domain name, contact details) and payment of a small fee. You should then receive a domain name registration certificate; check the detailed terms of the registration to ensure that the domain name is properly registered to you. Thereafter, you continue to pay small renewal fees to maintain your registration.
However, the situation is different if your chosen domain name has already been registered by someone else or is already being used by someone else as a trading name or is a registered trade mark. Domain names are 'trading names'. If there has been prior use of your proposed domain name in trade or as a registered trade mark then you will not be able to use that domain name without the risk of being involved in a legal dispute. Alternatively unscrupulous registrants may have registered a domain name that is substantially similar to your own pre-existing business name (which may also be protected by a trade mark registration). You are able to stop such use and recover such domain names which have been registered in bad faith further to the protection afforded to trade marks by English law.
Possible approaches to recovering the domain name include using one of the Internet domain name dispute resolution procedures, or taking action under trade mark legislation or the law of 'passing off'. On the other hand, if whoever has registered the domain name has a legitimate claim to it, you may have to accept the fact and choose another domain name. Take legal advice to find out what best suits your circumstances.
Does having a website expose me to legal issues overseas and how can I protect myself?
Because websites are available internationally, you are exposing yourself to international legal risk, regulation and taxation. Unless you are trying to sell or promote your products internationally, it is a good idea to ensure that your website clearly states that it is only for UK customers and that English law will be applicable.
What legal statements should I include on my website?
If you collect information on visitors to your website, perhaps through the use of contact forms or cookies, you must tell visitors (see the next point below).
Are there any restrictions on collecting and using information on visitors to my website?
Collecting and/or holding personal data falls under the Data Protection Act 1998, and will require that you register a notification with the Information Commissioners Office (www.ico.gov.uk).
Do websites count as advertising and what are the rules?
A website does not in itself constitute an advertisement - but parts of the website which advertise your products or services do. You should ensure that any such adverts comply with Advertising Standards Authority regulations. (For further information see www.asa.org.uk) The basic rule is that adverts must be 'legal, decent, honest and truthful'.
Are there any restrictions on the content of my website?
You must not use copyright material which you do not own - such as other people's text and pictures - without permission (if you or your employees have not taken the photos or created the text or images appearing on your site then you do not own them unless the creator of such works has signed an agreement transferring ownership to you).
Also linking to other web pages in a way which makes them appear to be part of your site or modifies their appearance could constitute 'passing off'. If you do want to link to another website, it is safest to ask permission from that website's owner.
Are there any legal issues to do with website design?
If you use a designer to create your website, ask the designer for a written guarantee that the site does not breach anyone else's rights and ask for a copy of any licences to use third party images or third party works which the web designer has incorporated into your site. To ensure that you have the right to modify the site in the future you will need a written agreement signed by the designer to transfer all copyright in the works on the site and in the source code to you. Otherwise the designer can stop you altering the website and can stop you instructing another designer to maintain and develop the website in the future.
Are there any potential legal problems with the software used in my website?
As with any other use of software, you must comply with the terms of any software licence. If you commission bespoke software, ensure that you own the copyright by getting a written assignment from the website developer. Just because you pay for this work does not mean you own the copyright in it!
What legal differences are there between selling over the Internet and traditional sales?
Sales made over the Internet to individuals are covered by the Consumer Protection (Distance Selling) Regulations (which cover any form of distance selling - for example, sales made over the telephone). These require you to send written confirmation of any order to the customer (by mail or e-mail) containing the necessary information (your name, description of the goods, and so on) and informing the consumer of the right to cancel the order.
If you are selling internationally, it may not be clear where the contract and transaction occur. In some countries, local laws will apply even if your terms and conditions specifically state that the contract is governed by English law. For example, consumers in other European Union countries are protected by their local consumer protection laws, and can take legal action in their local courts.
If you have a presence in a foreign country (e.g. an office there) transactions may also be subject to local regulation and taxation. You may also run into problems when you do not know who your customer is. For example, selling to minors may be illegal (depending on the country and what you are selling), and contracts with minors are usually unenforceable. You should take local legal advice to ensure that you are aware of your legal obligations and any risks.
Can customers cancel purchases made over the Internet?
Usually the answer is yes. There are some exceptions where consumers do not have an automatic right to cancel unless you agree otherwise: for example, sales of customised or perishable goods.
Corporate customers have no special right to cancel unless agreed in the contract.
How can I ensure that e-commerce transactions are covered by my terms and conditions?
You need the customer to agree to your terms and conditions before you accept an order (this is known as 'incorporation'). Simply hiding your terms and conditions somewhere on your website is not a good solution; instead, make sure that the customer has full notice of the terms and explicitly agrees for example, by ticking a box to confirm that they have read and agreed to them.
How does a contract come into force when using the Internet and e-mail?
A "contract" can be concluded orally or in writing. The same rules apply to contract formation using the Internet as in any other situation. There needs to be an offer and an acceptance of that offer. Using the internet can lead to many problems because of the written evidence trail left by email communication. Common pitfalls include:
- carelessly sending e-mail messages which create a contract unintentionally
- publishing information on your website which later forms part of contractual agreements without your wishing it to do so.
- poor website design allowing contractual obligations to be created unintentionally, or which are not covered by your preferred terms.
What happens if my website contains incorrect information (e.g. prices) or offers goods which are out of stock?
If this happens and a contract is concluded you are normally contractually bound to supply those goods. One solution is to ensure that the information on your website only constitutes an 'invitation to treat' and not an offer. An invitation to treat is an invitation for the customer to consider buying from you and an order from the customer would then constitute an 'offer' rather than an acceptance of your offer. To do this you need to use careful wording. If your website does contain incorrect information, you will then have the opportunity not to accept the customer's offer to buy and to correct any mistakes or update old information.
What are the regulations on the use of Internet Cookies?
On 26 May 2011, new regulations (the "Regulations") which govern the use of internet cookies ("Cookies") in the UK , will come into force.
All businesses that operate websites will need to be able to show that they have taken steps to comply with the Regulations. The Information Commissioner's Office ("ICO") has published guidance in relation to the Regulations and recommends that all businesses take the following steps:
- check what type of Cookies and similar technologies you use and how you use them;
- decide what solution to obtain consent will be best in your circumstances
The ICO have also recommended a number of solutions in order to comply with the Regulations.
The government will be taking a phased approach to implementing the Regulations. During this transitional period, if the ICO receive a complaint about a website, they will expect owners to be able to show that they have considered the Regulations and that they have a realistic plan to achieve compliance. It is therefore important that an audit trial is created to show compliance The ICO have not yet indicated when the transitional period will end, but will be publishing further guidance on how they intend to enforce the Regulations in due course.
A full text of the ICO guidance is available here.
I trade online and have a customer who wants to terminate a contract for goods that I have specifically designed and made for him. He says that he has the right to do this provided he does so within fourteen days, is this correct?
If customers who are consumers are able to purchase goods or services on-line via your website, Consumer Contracts (Information Cancellation and Additional Charges) Regulations will apply.
The Regulations give the consumer a fourteen-day "cooling off period" to enable the consumer to cancel the contract. The period is seven working days from the day after the date of delivery of the goods, or, in the case of services, from the day after the date of the contract. However, if the goods being sold are, for example, perishable or bespoke, there is no right to cancel.
I retain the personal information that customers input when I sell to them online. One of my customers has said that I hold too much of their information, can this be correct?
If you want to keep name, address, etc., details of customers who visit your website, your website and you must comply with the Data Protection Act 1998. You must only use that data as is strictly necessary for the performance of the contract between you and the customer.
You should put a 'privacy statement' or 'data protection notice' on your website, in which you should tell the customer of all and any purposes for which their data may legally be used without gaining their consent, and tell them how to get in touch to change their details, or have them removed. If you want to use their data for unrelated purposes such as marketing other products, you will generally need their consent. You will also need to register with the Information Commissioner.
If you would like help and advice, speak to a member of our team today. Find the number you need on our contact page.
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.
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