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Issues To Consider When Selling Online

Friday, 19 April 2013

Transacting online is now common practice as it is both cost effective and time saving for consumers and businesses. As online activities continue to expand rapidly, there is still a need to be aware of buyer’s rights and other commercial issues.

In particular, it is important for sellers to be transparent and to ensure clarity about the point at which there is a legally binding contract between the parties.

Consumer Regulations

There are numerous regulations that apply to consumers buying online that deal with unfair terms, distance selling, descriptions etc. Sellers should keep up to date with the latest developments.

According to article 10 of the EU Directive on e-commerce, it is of utmost importance for businesses selling online to explain clearly and unequivocally all the necessary steps of contract formation. This includes the moment of the conclusion of the contract, the moment at which it is accessible after formation and procedures for handling errors.

Consumers must be fully informed by e-businesses about their rights and obligations prior to the conclusion of the contract.

Seller’s Information

Businesses selling online are required to reveal as much information as possible about their identity on their websites such as the company's name, address and VAT number so buyers can be fully aware about who they are buying from.

The Distance Selling Directive also requires sellers to retain transparency on the Internet and allow for a cooling-off period. In addition to the identity of the seller, online businesses are expected to effectively and adequately explain:

  • The main characteristics of their goods or services
  • Price
  • Arrangements for payment and delivery
  • The existence of the right of cancellation and withdrawal

Information provided by the seller should be clear, unambiguous and easily accessible to potential consumers.

Terms and Conditions

Terms and conditions need to be brought to customer's attention before the contract is concluded. The Unfair Terms in Consumer Contracts Regulations 1999 protects the consumer by providing that the contract terms must be drafted in plain language. Contracts not individually negotiated should not create a significant imbalance to the consumers' detriment, otherwise they will be unenforceable.

Jurisdictional Issues

As e-commerce is an international activity, it can involve contracting parties from different countries so jurisdiction and applicable law issues should be considered. Some types of goods which are legal to sell in one jurisdiction may be prohibited in other jurisdictions. Businesses should understand their legal exposures.

Data Protection, Copyright

Online businesses should take into consideration data protection and copyright matters to avoid breaches of intellectual property law.


Compliance with information requirements and careful management of the contracting process should ensure a limited risk of falling foul of the multitude of regulations faced by online sellers. Specific legal advice should be sought to ensure your business meets current best practice.

If you need assistance to ensure your website policies and procedures are regulation compliant, Rollingsons has experienced lawyers who can assist you. For more information please contact James Crichton via e-mail or by telephone on 0207 611 4848.