Music Go Round Ltd complies with the following requirements and conditions for the Sale of Goods and Services
BUSINESS TO CONSUMER – THE SALE OF GOODS AND SERVICES THROUGH A WEBSITE
This factsheet only covers transactions where the Trader is a business, and the buyer is a Consumer.
A Consumer means an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession.
The website has become a crucial method of communication for businesses today. Therefore, it is not surprising that many companies are using the internet as a medium for selling goods. As with any other type of business medium, it is important to have terms and conditions in place.
The relevant terms must be set out in writing as an online contract will be as enforceable as any other type of contract (See our online terms and conditions for a specimen agreement). The specimen agreement contains general terms and conditions which may be included in these types of agreements. However, it may not be appropriate for all businesses. To reduce the risk of legal challenge, it is important to ensure that your agreement is specifically drafted and regularly reviewed.
If you sell goods to Consumers through a website (a Consumer is generally defined as an individual who, in his dealings with a Trader, is not acting for the purposes of a business), it is important to be aware of the following legislation:
1. The Consumer Rights Act 2015
Amongst other things, the Act states that goods that are sold must be as described, fit for purpose and of satisfactory quality.
If Consumers discover that products do not meet these requirements they can reject them and ask for their money back providing they do so quickly (initially within 30 days). Alternatively, either within the initial 30 days or subsequently, they can request a repair or replacement, and if this is not successful, they get a further opportunity to reject or claim compensation.
When selling goods and/or services to Consumers, the Act cannot be excluded.
See our factsheet on Business to consumer – Sale of goods law for further information about this.
In addition, the Act revokes and replaces the Unfair Terms in Consumer Contracts Regulations 1999. The Act protects Consumers against contract terms and notices that give traders an unfair advantage. It consolidates and simplifies existing law on unfair terms in consumer contracts.
The Act enables regulatory bodies (including The Consumers’ Association, “Which?”) to police and take action against traders that use terms in consumer contracts that are potentially unfair. This is a shift in policy from previous legislation, where it was up to the consumer to question the fairness of a provision in a trader’s T&Cs.
What is an unfair term?
A term in a Consumer contract or notice is unfair if it creates a significant imbalance in the rights of the parties, to the detriment of the Consumer, and is contrary to a requirement of good faith. This test applies to all terms except those setting the price or describing the main subject matter of the contract. However, all written terms must be transparent and in plain and intelligible language, to ensure that Consumers can make an informed choice about whether or not to enter the contract. The Act makes certain terms automatically unfair (the “black list”) and provides a number of examples of terms that might be unfair (the “grey list”). The Competition and Markets Authority has produced the following guidance:
Consequences of using unfair terms
Using unfair contractual terms or notices can have a number of consequences for the Trader, and importantly, they will not be binding on a Consumer. The Competition and Markets Authority (CMA), Trading Standards and other regulatory bodies might apply for an injunction to prevent a Trader from using a term in their T&Cs, even if no complaint has been received. Alternatively, a regulatory body might request an undertaking from the trader that the term will no longer be used. This poses a reputational risk for traders, as, in both instances, the CMA will publish details of any application for an injunction or undertaking that is accepted.
2. Alternative dispute resolution and online dispute resolution requirements
Every now and again as a trader you’ll find yourself in a position where you receive a complaint from a customer. The first step is to try to resolve the matter with the consumer directly.
If you trade online with consumers you also need to consider the following:
- Where a dispute cannot be settled directly, the trader should provide the consumer, on paper or another durable medium, with the information on relevant ADR entities and specify if he/she will make use of them
- provide consumers with an accessible electronic link to the ODR Platform on your website, the link: http://ec.europa.eu/consumers/odr/;
- include your email address on your website;
- provide a link to the ODR Platform in any emails regarding offers in relation to consumer sales or service contracts;
- provide relevant information, where applicable, in your general terms and conditions applicable to the website operator’s online sales and service contracts.
For those committed to an ADR (Alternative Dispute Resolution) scheme through their governing bodies, by law or through a contractual obligation for example those in the financial, communications or energy sectors, this will be in addition to giving details, on your website, of the certified ADR provider serving your sector.
Further information can be found in our factsheet on Alternative Dispute Resolution (ADR) and Online dispute resolution (ODR) Platform.
3. The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013
The Regulations give protection to consumers who shop by phone, mail order, via the Internet or digital TV. The protection includes:
- The right to receive clear information about the goods/services (including information about the main characteristics of the goods/services, the identity of the trader (including address/telephone number etc.), total price of the goods/services (including taxes/charges), delivery charges and the arrangements for payment, delivery and performance of the contract) before deciding to buy.
- Confirmation of this information in writing.
- A cooling off period of 14 calendar days in which the consumer can withdraw from the contract.
See our factsheet on Business to consumer – Distance and doorstep selling for further information.
4. The Data Protection Act 1998
The purpose of the Act is to protect the rights of the individual about whom data is obtained, stored, processed or supplied rather than those of the people or organisations who control and use personal data. The Act applies to both computerised and paper records depending on the type of filing system.
If you wish to pass on individuals’ details to other organisations or wish to contact them about promotions in the future, you must obtain their consent to this. Provisions of this kind may be acceptable where there is a free choice to agree to them or not, for instance, via an option separate from the rest of the contract. But note that fairness is much more likely if Consumers have positively to “opt in”. A chance to “opt out” in small print may be missed or misunderstood. In any case, the chances of fairness will be increased if the significance of the choice is indicated and drawn to the Consumer’s attention.
5. The Electronic Commerce Regulations 2002
These Regulations state that when selling online, information must be given in a clear and unambiguous manner about the technical steps to complete a contract, prices must be clearly stated, details must be given about the supplier (in particular, the name and address (and registered office address if this is different) e-mail address, the company’s registration number, any Trade or Professional Association memberships and the company’s VAT number) the fact that any orders must be acknowledged without undue delay and there must be available to the user of the site the ability to identify and correct any errors prior to the placing of their order.
6. The Electronic Signatures Regulations 2002
These Regulations apply to any contract and not just those entered into with Consumers. The main effect of the Regulations is to make electronic signatures legally valid. Signatures are not actually necessary for the conclusion of every contract, but they can have three essential functions when considering online contracts:
- To identify the person who has bought the product.
- To indicate a personal involvement, or trustworthiness.
- To indicate an intention to be bound to the contract.
The method of collecting the electronic signature will vary, depending upon the goods being sold. Generally, the purpose of having an electronic signature is the third function listed above – indicating that the purchaser is making an offer to contract.
7. Excluding liability
It is not advisable to exclude liability when dealing with Consumers. You are never able to exclude liability for faulty goods or death and personal injury. If a Consumer makes a mistake when entering details online, s/he should be given a reasonable opportunity to correct the error before they place their order. If you fail to do so, Consumers will be entitled to rescind the contract (unless a court orders otherwise).
Most business guidance on consumer law is the responsibility of the Chartered Trading Standards Institute (CTSI): http://www.tradingstandards.uk. The CTSI, for example, took over the hubs developed by the Office of Fair Trading on the law around sales of goods and distance selling. The Competition and Markets Authority may issue specific guidance for businesses where it has conducted a market study or other in-depth analysis of business practices in a particular sector, or in relation to the application of unfair contract terms legislation, where it retains a lead role. Contact details are:
Competition and Markets Authority
37 Southampton Row
London WC1B 4AD
Email: [email protected]
General enquiries: 020 3738 6000