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25

Apr 2018

Doing business online: a guide for new ventures

The internet opens up a whole host of opportunities for new ventures, including the chance to increase visibility and secure new business.  However, doing business online is a heavily regulated area which means careful planning is required, particularly where you will be selling direct to the public. We outline the five key things you need to consider when selling online to consumers.

Selling at a distance

Members of the public who purchase goods over the internet are not able to inspect those goods before they buy them; nor are they able to fully assess a service offering.  Because of this your website, and any other form of electronic communication used to conclude a contract, will need to provide:

  • a description of the goods or services offered for sale;
  • the total price payable;
  • a timescale within which the goods or services will be provided;
  • details of any additional costs or charges; and
  • confirmation of who will be responsible for the cost of returns.

Your contact details and geographic location must also be clear, as should any terms and conditions that apply.

Where you want time to consider an order before committing to fulfil it, you will need to make this clear.  Businesses who commit to contracts as soon as the order button is pressed run the risk of being bound by errors in displayed information, including pricing mistakes.

The right to cancel

Members of the public who purchase goods or services over the internet also have 14 days to cancel their order.  For services, this 14-day period begins from the date on which the contract for the services was entered.  For goods, it runs from the date on which the goods were received.

The right to cancel must be made clear and a form provided to enable cancellation to be confirmed.  You cannot, however, insist on consumers using this form if they wish to use some other means to cancel.  

Where digital data is being offered for sale, provision must be made for customers to agree to waive their right to cancel if they wish to download the data instantly. 

The risk of damage

You will be responsible for the condition of any goods sold until they are received. It is therefore important that you research delivery options and select a trusted carrier with adequate insurance.  For high-value goods consideration should be given to purchasing additional insurance to ensure you are covered for the cost of replacement in the event of loss or damage. 

International sales

There are additional issues that need to be considered if you intend to ship goods abroad, including increased delivery costs, import and export taxes, changes in the exchange rate and any applicable national or regional regulations.

Attention should be given to your pricing structure to ensure you remain profitable in the face of external factors outside of your control.

Bespoke terms and conditions

Some of the rules governing consumer protection in online contracts are mandatory and cannot be deviated from.  However, others only apply in the absence of alternative arrangements being put in place.  For example, under the Consumer Rights Act goods ordered online must be delivered within 30 days unless a longer period has been agreed.  It is therefore possible to create trading arrangements more suited to your needs by using carefully crafted terms and conditions.

As a new business you may be tempted to copy someone else’s terms and conditions to save time, but this can be a dangerous tactic.  It is far better to have your own bespoke terms and conditions prepared by a solicitor who understands your business requirements and the marketplace you are working in.  This is particularly important when it comes to data protection issues under the new General Data Protection Regulation where the legal requirements concerning the collection and processing of customers’ personal information varies significantly depending on your activities.

The contents of this article are for the purposes of general awareness only.  They do not purport to constitute legal or professional advice.  The law may have changed since this article was published.  Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.

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