Updating T&Cs for e-commerce

Nigel GreenawayDirector - Corporate, Greenaway Scott

2020 saw many retailers increasing their online presence in light of the Covid-19 pandemic and the subsequent lockdowns and restrictions in the UK. Businesses should consider how their terms and conditions need to be updated to reflect the new e-commerce offerings. They also need to consider if they are selling to businesses, consumers, or a combination of both, as there are different rules depending on the customer-base.  The following is not an exhaustive list of considerations, as other updates may need to be made in light of the pandemic and with regard to the UK’s departure from the European Union (Brexit).

Delivery

Businesses should consider the impact of Brexit on international delivery charges. Orders may now be subject to import duties and taxes. The terms and conditions should make it clear who is responsible for this, and where possible, give an indication of the cost. Customers should be made aware at the point of purchase on the website of all applicable delivery charges. The terms and conditions should be easily accessible for the customers e.g. if there are potential additional charges, there should be available links on the website for the customer to access the relevant terms.

If the business does not offer international delivery, this should be made clear before the order is placed, or restrictions on available delivery addresses placed on the website.

Method of payment and currency fluctuations

Businesses should make clear what payment methods they accept and where third party finance providers like Klarna and Clearpay are being used, make the corresponding terms for these providers available for the customer.

For cross-border transactions, retailers should consider what currency they will accept and consider if a currency fluctuation clause is needed. This ensures that in relation to payments under the contract, the customer is aware of risks associated with volatile exchange rates and who bears this risk.

How orders are accepted

Retailers should review their order acceptance process and consider whether or not the terms reflect this. It should be made clear that the customer is making an offer that the business is able to accept or reject. This ensures that the business is aware when the contract has been entered into, the issues regarding the postal rule are avoided (i.e. acceptance will not deemed effective at the time of sending) and the business can reject the order. If this is not included, a contract would be formed as soon as the customer makes a payment. This clause is therefore essential for unforeseen events where the business may be out of stock, there are unexpected limits on resources or the business is unable to meet delivery deadlines, for example. Acceptance with regard to online orders is often provided by a confirmation email and a clause should be included that outlines those situations where the business is unable to fulfil an order.

Business or consumer?

The terms will vary based on whether the business is selling products/services to another business or to an individual consumer. It is important to either have separate terms and conditions for each, or to clearly highlight which terms apply to consumers and which to businesses. We have listed a few examples of clauses that will vary between the two:

  • Entire agreement clause. This clause only applies to business customers and essentially prevents any previous statements/representations from being enforceable. This would be unfair and unenforceable in a consumer contract.
  • Consumers have a right to change their mind about an order within 14 days under the Consumer Contracts Regulations 2013. This should be stated in the terms and conditions along with all the conditions attached to it. It is possible to arrange this clause to provide for a goodwill guarantee and allow the consumer a longer period of time to change their mind which has been popular during the pandemic. It may also be helpful to include details of products where the consumer does not have a right to change their mind (e.g. services once completed, digital products once downloaded etc.). There is no obligation to put in an equivalent term for business customers.
  • It is imperative to include a statement of the consumer’s legal rights in relation to the products. This includes for example, that the consumer’s statutory rights are not affected by the guarantee.
  • The business’ responsibility for loss or damage will also vary depending on the status of the customer and should be included within the terms.  

The information contained in this article is for information purposes only and is not intended to constitute legal advice. If you require further information our commercial team would be more than happy to assist you. Please contact us at commercial@greeenawayscott.com or call us on 029 2009 5500 to speak to one of our team.


Contributing Advisors

Matthew SuttonDirector - Corporate, Greenaway Scott

Leanne ThomasDirector - Corporate / Head Of Pembroke Dock & West, Greenaway Scott