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Selling or Buying Online? Be Aware of your Rights…. and Obligations
By Christopher J Sherliker

Businesses selling their goods or services online or ‘at a distance’ should, as a minimum, provide their consumers with their full name and address (not just a PO Box), an email address (not simply a web form), a VAT number (if applicable) and, if it is a company, their place of registration, registered office address and registration number.

Although most websites will bury this information in densely written terms and conditions, it is important that consumers are provided with this information in a clear and comprehensible manner before they enter into a binding contract to purchase the goods or services.

Furthermore, businesses should be aware that as well as the standard implied terms under the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982, the Distance Selling Regulations provide their ‘home shopper’ consumers with additional rights.

Under the Regulations, consumers have the unconditional right to cancel by giving written notice to the retailer in a manner that is appropriate to distance communication. For example, a notice to cancel by email would be appropriate if the goods/services were purchased online. The retailer must make the consumer aware of the conditions and procedures for exercising their right to cancel.

A 2006 Office of Fair Trading (OFT) study into Internet shopping found that more than half of the Internet shoppers surveyed online did not know about their right to cancel. After a closer look at certain websites, the OFT found that 12 percent of electrical sites and 39 percent of music retailers’ sites selling CDs did not appear to mention the cancellation period. Failure to do so will extend the cancellation period, usually set at seven working days beginning with the day after the consumer receives the goods – more commonly known as the “cooling off” period.

Browsing through various online consumer forums quickly reveals that the most hotly debated and misunderstood issue in relation to online or distance selling shopping is that of refund and reimbursement. Consumers and retailers appear to be equally baffled. The Regulations state that the retailer must refund the price of the goods/services as well as any delivery fee or administration fee. Any refund should be made as quickly as possible and, in any event, within 30 days of cancellation.

The conditions and procedures for returning goods must be clearly set out in the retailer’s terms and conditions because the Regulations in themselves do not require the consumer to return the goods, but simply to make the goods available to the supplier. If the retailer wants the consumer to pay for returning the goods, this must be made clear in their terms and conditions and confirmed in writing.

It may also come as a surprise to consumers and retailers alike that the Regulations do not require the consumer to return the goods in a ‘saleable condition’ – the consumer only has the obligation to take reasonable care of the goods. If that requires opening the packaging and trying out the goods, then the consumer would not have breached his or her duty to take reasonable care of the goods. In these circumstances, the retailer cannot insist that consumers return the goods as new or in their original packaging. They can, however, ask consumers to return goods with the original packaging, but they cannot insist on this. In the case of goods such as earrings that have hygiene seals, retailers may require the consumer to exercise reasonable care by not removing the seals when examining them.

Businesses operating in the sphere of financial services, transport, accommodation, leisure services and food, drink or other goods for everyday consumption delivered by a ‘regular roundsman’ (such as a milkman) are exempt from the Distance Selling Regulations.

Breaching the Regulations may result in either the Local Trading Standard officers or the OFT exercising their power to seek an enforcement order from the court to ensure that the retailer complies with the Regulations.

Added: 19th May 2011

Christopher J Sherliker is a partner for Silverman Sherliker LLP who provide legal solutions across a spectrum of requirements.  Find out more about Silverman Sherliker LLP.

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