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Explanatory Notes
Terms & Conditions for Sale of Goods Online (Ecommerce Ts & Cs)
EXPLANATORY NOTES
These terms and conditions should be displayed on the website where goods are being sold. The terms and conditions should be easily accessible by visitors to the website. In addition, a customer who wishes to purchase goods on line, using a credit card or some other payment method, should be required to confirm that he/she has read the terms and conditions and accepted them before proceeding to the checkout. In order to have evidence that the customer is aware of the tems on which goods are sold, the usual system is to have a 'tick box' which must be ticked by the customer confirming that the terms and conditions have been read before the sale process can be concluded.
The sale of goods online is subject to quite a lot of regulation. The key features of the 'Distance Selling' regulations in the UK are:
you must give consumers clear information including details of the goods or services offered, delivery arrangements and payment, the supplier's details and the consumer's cancellation right before they buy (known as prior information)
you must also provide this information in writing
goods must be delivered within 30 days unless agreed otherwise
the consumer has a cooling-off period of seven working days. The cooling off period begins as soon as the order has been made. In the case of goods, it ends seven working days after the day of receipt of the goods. In the case of services, it ends seven working days after the day the order was made but if the consumer agrees to the service beginning within the seven days, the right to cancel ends when the service starts
where consumers notify the supplier in writing or another durable medium that they wish to cancel the contract, they must be refunded within 30 days all money paid.
For details of the UK Regulations there is a useful Government website that you should look at:
http://www.dti.gov.uk/ccp/topics1/ecomm.htm. This is the DTI (Department of Trade & Industry) website with information and links to guidance notes as well as the Regulations themselves.
There is also legislation of a more general nature concerning the sale of goods, designed to protect the consumer. The DTI Factsheet on this can be found at:
http://www.dti.gov.uk/ccp/topics1/facts/salegoodsact.htm
You are advised check the information on these websites before finalising your Terms & Conditions.
Turning to the detailed clauses, comments are set out below:-
1. Definitions and Interpretation
The name of the company selling goods should be inserted as indicated. Also, you must identify clearly the "Goods" which are being sold.
Clause 1.2 is designed to make it clear that the seller's terms and conditions will take precedence: online sellers do not have too much of a problem here but in other situations, a purchaser may confirm that he wishes to buy on his own terms and conditions and an argument can then develop as to whose terms and conditions actually apply to the contract this is known as the "battle of performance".
2. Price
It is a legal requirement that the price of goods is clearly shown and that the website makes it clear whether VAT is included or excluded. In addition, the cost of packaging and postage must be identified and shown. The wording in 2.2 is designed to reflect this but it may have to be adjusted depending on what information is provided on the website.
3. Ordering Goods Online
In 3.1 the customer is required to "warrant" that the information that he provides when he purchasing is accurate this is intended to protect the seller against credit card fraud, although in practice this can be difficult.
3.2 attempts to deal with this problem in another way: when a credit or debit card payment is made on line, it sometimes happens that the details provided to the company processing the payment do not fully match the details held by the customer's bank. In spite of this, the banks will sometimes allow the payment to proceed. A discrepancy will usually be highlighted by the company processing the payment and this will then enable the seller to make some further enquiries before dispatch of goods. Worldpay, for example, notify the seller with a 'Caution' or a 'Warning' depending on the perceived level of risk.
Clause 3.3 is designed to give the seller some protection if there is any technical error which arises.
4. Privacy
The Data Protection Act controls what people can do with information which is provided to them. The wording of this clause may need to be amended if the seller is intending to supply lists of customers to a third party, the consent of the customer should be obtained.
5. Payment
This is reasonably self-explanatory and makes it clear that, whatever method of payment is used, payment must be received in full before the goods are dispatched. This again can give protection if a credit card payment is cancelled.
6. Delivery
It is possible that the delivery date will be specified on the website but if not, it should be provided by the seller and since deliveries cannot always be guaranteed, 6.1 is intended to give the seller some protection.
Clause 6.3 requires the customer to give prompt notice if the goods arrived in a damaged state.
7. Cancellation
There are numerous regulations with regard to "distance selling" whereby a customer has the right to cancel an order within seven working days from the date he/she receives the goods. This clause is intended to comply with those regulations.
The seller is entitled to impose certain charges on the customer and this is covered by 7.2 and 7.3.
Under the distance selling regulations, goods which have been personalised for the customer or which have been made to the customer's specification are excluded from the cancellation provisions and this is made clear by 7.4.
8. Risk and Ownership
Once the goods are delivered to the customer, the customer becomes responsible for loss or damage. Clause 8.1 also allows for the risk to pass to the customer if there is an arrangement whereby the customer agrees to collect the goods but fails to do so within a specified period.
Under 8.2, the seller retains ownership until all payments have been received this gives the seller the right to recover the goods if they are delivered before full payment has been received.
9. Warranties and liability
Under the general law there are implied warranties on the part of the seller that the goods which he is selling will meet the description and that they will be reasonably fit for the purposes for which they are required etc. This clause contains a fairly basic warranty on behalf of the seller.
Under 9.3, the seller in effect offers a guarantee that if within a specified period any defect in the goods appears, then the seller will either repair or replace those goods, but the cost of return is at the customer's expense. Paragraphs 9.4 and 9.5 are designed to limit the seller's liability. Here gain there are laws designed to protect the purchaser and the seller should check the legal position.
10. Notices
Whenever a claim arises, it is sensible to have a formal method of giving notices and that is dealt with here. If goods are being sold on line, it may be logical for e-mail notices to be accepted but the seller might prefer to have a more traditional method of notice e.g. by fax or post.
11. Customer Default
This clause sets out grounds on which the seller has the right to cancel the contract and recover possession of any goods which might have been delivered.
12. Force Majeure
Certain unforeseen circumstances beyond the control of the parties might prevent the seller from making a delivery in accordance with the terms and this is covered here.
13. General
There are some fairly standard clauses known as 'boiler plate' clauses which lawyers like to see in agreements of this type and some of them are set out here.
14. Intellectual Property
Where goods which are sold are subject to Intellectual Property rights e.g. a work of art or a piece of sculpture, sale of the goods does not give unlimited freedom to the purchaser: copying a work of art and then selling it would require the consent of the artist.
15. Disputes
If there is a problem that cannot be resolved amicably, this clause allows for the possibility of mediation and, failing that, a dispute will be referred to the English courts. Mediation is a process where an independent third party endeavours in an informal meeting to resolve a dispute and it is a lot cheaper than the court processes. See our Info Centre for more information on Dispute Resolution.
16. Governing Law
Since the contract is written with English law in mind, this is the law which governs the contract.
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