Getting your Digital House in Order: A Checklist of Website Legal Requirements
26 June 2014
Nearly every business has a website, whether just for information purposes or for selling goods or services. Yet, how many businesses are aware of the legislation which applies to websites and e-commerce transactions? Is your website designed to comply with WEEE, e-commerce, equality and data protection legislation?
It is a criminal offence not to comply with some of this legislation. The way in which you commission and design your website also has significant implications for your business. Over the next three blog posts we’re going to set out some important questions that online businesses need to consider. (Part 2 and Part 3 are also available.)
Do you own your website?
If you paid someone outside your company to create your website, you may not own the intellectual property in the website (such as the design) unless you have a written agreement with the designer transferring the intellectual property to you.
Does your website bind you?
Depending on the design of your website, you may be bound to fulfil orders for goods which are out of stock or to provide the goods or services at a misquoted price.
Through the design of your website and by carefully drafting the applicable terms and conditions, the online order process can be designed so that its completion amounts to an offer by the buyer, which the business may accept or reject. In this way, the business can decline an offer if, for example, the product in question is out of stock or the price is misquoted.
Do you perform online consumer contracts within 30 days?
The European Union (Consumer Information, Cancellation and Other Rights) Regulations, 2013 (the “Consumer Rights Regs”) require an online seller to perform its obligations under an online consumer contract within 30 days after the consumer’s order, unless the consumer agrees otherwise.
Did you know consumers can cancel online contracts without cause?
The Consumer Rights Regs allow consumers who purchased goods or services online to cancel most contracts without having to give any reason provided it is within fourteen calendar days of delivery of goods or conclusion of a service contract. In such an event, the supplier is required to give a full refund to the consumer. However, in the case of the sale of goods online, the consumer must bear the costs of returning the goods unless the trader agrees otherwise or fails to inform the consumer of this cost prior to conclusion of the contract.
This highlights the importance of carefully drafted terms and conditions. Similar regulations apply to the conclusion of online financial services contracts and provide for an extended cancellation period.
Are prices quoted on your website compliant with pricing rules?
If you sell goods to consumers, it is important to be wary of the specific laws that govern the publication of the price of goods.
Does your website contain the minimum prescribed information and conditions?
The E-Commerce Regulations set out certain minimum information to be provided prominently on a website in a manner which is easily, directly and permanently accessible. This minimum information includes, among other details, the name, geographic address, e-mail address, and VAT number of the service provider.
The Consumer Rights Regs require businesses that sell to consumers through online distance selling, to provide certain information to consumers before concluding any contracts. This prescribed information includes, for example, a requirement that traders label any payment button with the wording “order with obligation to pay” or some similar formulation. Written confirmation (or confirmation in another durable form accessible to the consumer, such as an e-mail) of this information must be also provided. An online seller who purportedly enters into an online contract with a consumer and who fails to supply the relevant prescribed information in accordance with the Consumer Rights Regulations may not be able to enforce the contract against the consumer.
Does your website comply with the minimum prescribed procedural requirements?
The E-Commerce Regulations set out certain procedural requirements which must be adhered to once an order has been placed via a website. For instance, when a business receives an order through its website, this order must be acknowledged without undue delay and by electronic means. In respect of breach of the E-Commerce Regulations, the Consumer Protection Act empowers the National Consumer Agency (soon to become part of the Competition and Consumer Protection Commission) to require a trader to make an undertaking. The subject of such an undertaking could be to:
- refrain from/discontinue such breaches;
- compensate a consumer or class of consumers; or
- publish, at the trader’s expense, an advertisement in a newspaper making a clarification about the prohibited practice.
An undertaking can be directed at the infringing company, or certain officers of the company, including a director. Furthermore, any breach of such an undertaking can be subject to a ‘prohibition order’ through court proceedings brought by the NCA or individual consumers. The power to require traders to make undertakings and also to seek prohibition orders applies equally to infringements of various other consumer protection legislation including the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995 and 2000, the European Communities (Requirements to Indicate Product Prices) Regulations 2002 and the Consumer Rights Regulations. Another enforcement option at the NCA’s disposal is a compliance notice which requires the trader to cease the practice which infringes the consumer protection legislation mentioned above.
See next week’s post for more guidance on website legal compliance.
The content of this article is provided for information purposes only and does not constitute legal or other advice. Mason Hayes & Curran (www.mhc.ie) is a leading business law firm with offices in Dublin, London and New York.