HomeArticles What you need to know when trading online
What you need to know when trading online
When a company sets up and operates a website, it will need to address a number of issues in the contractual arrangements that are necessary in order to establish the company’s internet presence, such as the design, development and hosting of the website, content licences, support and service levels agreements. These are critical documents that a company will need to agree whether the website is a fully interactive e-commerce site or comprises only a simple promotional statement about the website owner (acting as a shop window).
When the company is operating a transactional website (i.e. is selling its products and services through the website), it is important to ensure that just as in the off-line world, it has a valid contract with its customer on which it can rely on. This on the other hand will also give the customer the assurance that it deals with a reputable company.
When making a (on or off line) contract, you need 3 main elements, in order to have a valid contract:an offer (for example, toaster for sale);a consideration (for example, for £10); andan acceptance (for example, I will buy it, here is the money).The same applies when you are selling or buying products or services online:
1 - Offers and invitations to treat:
Design the website as an ordinary shop window, where a customer when ordering a company's products and services is simply making "offers" to purchase.
The website must be clearly stating that the supplier will not be bound unless and until it accepts the customer's offer.
The online order form must clearly contain the supplier's standard terms and conditions. These terms must apply to the offer made by the customer.
Please note the terms of sale and the terms of website use are two different documents and should not be incorporated into one.
Where necessary, the online supplier should be able to verify the identity/age of the customer.
2 - Consideration and Acceptance
Clearly explain on the website how offers and acceptances are to be communicated and received and make it clear that, the customer is making the offer (which the supplier may or may not accept).
3 - Incorporation of terms
Ensure that, the company’s terms and conditions are effectively incorporated in the contract with the customer, by bringing them to the customer’s attention, before the contract is made.The website should be set up in such a way that, each customer has to scroll through all the terms and conditions and then click on an “Accept” button, before being allowed to place an order. Displaying the terms in a prominent place on the homepage of the website to ensure that, the customer can read them at anytime.
4 - Terms implied by statute and other mandatory statutory provisions
The supplier must check with its legal representative whether any terms may be implied by statute into the contracts with the users and to what extent such terms and other liabilities of the customer may be legally excluded. Special care is necessary in the event the customers are consumers.
5 - Governing law and jurisdiction
Ensure that, the supplier’s terms and conditions specify the law and the courts of the supplier’s own jurisdiction, as the governing law of the contract, in order to avoid the uncertainties which arise, where no express choice is made. Note however that, in some circumstances, the mandatory laws of the customer’s home jurisdiction may nonetheless be applied (especially where consumers are involved).
All articles are for general purposes and guidance only and do not constitute legal or professional advice. Copyright 2010 Anassutzi & Co Limited. All rights reserved. Information may be shared or reproduced only if accompanied by the author’s name and bio.
Add comment
Newsletter
Newsletter
Subscribe to our FREE newsletter.
Required *
We are proud to be associated with the Business & IP Centre
Articles 
