E-commerce is also complicated by the fact that it often involves instant online transactions where your business may be selling or buying to or from a 3rd party based anywhere in the world. Different laws can apply depending upon where the transaction takes place and it may be that you need to comply with laws of more than 1 country.
Due to the speed of doing business online, it is imperative that you have a good understanding of what laws may apply and take practical steps to protect your interests and to ensure that there is some form of contract to protect you, which is to your advantage, or at least, which is not highly unfavourable.
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With the rapid expansion and development of the Internet, the way customers shop and commercial law operates has changed. More and more business is done online with the use of the World Wide Web. In fact, some companies’ sole existence is as an online business.
Electronic commerce or e-commerce means buying or selling products by electronic means such as the use of the Internet. There are a range of online shops, which only exist on an Internet platform; others treat the Internet as a medium which facilitates trading. E-commerce includes the exchange of data necessary to make a purchase or place an order such as names, addresses and bank or credit card details of both the supplier and the consumer.
Distance selling can save costs (there is no need to pay rent or mortgage on a shop premises). Some businesses operate telemarketing with orders placed by a phone, e-mail or post as well as from a catalogue with the business’ offer. Distance selling is not the same as online selling where the process of sale happens online.
Who do they apply to?
The regulations apply to every business which offers Internet marketing within the UK or European Economic Area (EEA), which means it is nearly every commercial website. Such businesses must comply with the E-Commerce Regulations, regardless of whom it sells its products or services to (individuals or other businesses). If a business sells goods or services on the Internet, by email or text message, it has to comply with the regulations.
The e-commerce regulations only apply to the laws passed from the 30 July 2002. The regulations do not apply to tax, gambling or lottery and do not affect data protection laws. Direct marketing over a phone or fax are not covered by the regulations.
The regulations aim to ensure transparency in online transactions. The seller needs to provide the consumer with necessary information such as terms and conditions and fine print as well as give them the right to cancel their order within a specified time.
The following minimum information must be provided to the consumer and be easily accessible:
Under the e-commerce regulations an online seller must allow the consumers to correct any errors whilst placing an order (such choosing the wrong quantity or product or inputting an incorrect delivery address) before their order is complete (normally before it is dispatched).
The seller must give the consumer notice that their order has been received. It usually takes the form of an automated message: ‘Thank you for placing your order’ or ‘your order has been received’.
The seller needs to provide the consumer with terms and conditions of the sale on their website and it is advisable that you are familiar with them in terms of delivery and payment methods, returns and refunds before placing your order.
As with many aspects of the internet, it move so fast, and is so difficult to regulate, that many online sellers are not even aware of the regulations, and others simply ignore them. Do so at your peril, the law will eventually catch up and aside from anything else, a reputation for not being trustworthy or complying with the law can spread virally on the internet very fast.