Website-law.co.uk

The Consumer Protection (Distance Selling) Regulations 2000 (the “Distance Selling Regulations”) came into force on 31 October 2000.  They implemented into English law the main provisions of Directive 97/7/EC of the European Parliament and the Council of 20 May 1997 on the protection of consumers in relation to distance contracts.

This post focuses upon the information that must be disclosed by a website operator where the Distance Selling Regulations apply.  I will cover the details of the right of cancellation under the Regulations in a future post.

The Distance Selling Regulations apply to “any contract concerning goods or services concluded between a supplier and a consumer under an organised distances sales or service provision scheme run by the supplier who, for the purposes of the contract, makes exclusive use of one or more means of distance communication up to and including the moment at which the contract is concluded” (Regulation 3(1)).

However, there are certain classes of contract that always fall outside the Regulations in whole or part.

The following types of contract are entirely exempted from the Regulations: contracts for the sale or other disposition of an interest in land except for a rental agreement, contracts for the construction of a building where the contract also provides for a sale or other disposition of an interest in land on which the building is constructed, except for a rental agreement; contracts relating to financial services (these are subject to a separate set of regulations); contracts concluded by means of an automated vending machine or automated commercial premises; contracts concluded with a telecommunications operator through the use of a public pay-phone; and concluded at an auction.

In addition, the following types of contract are exempted from most of the provisions of the Regulations (including the disclosure provisions): timeshare agreements; contracts for the supply of food, beverages or other goods intended for everyday consumption supplied to the consumer’s residence or to his workplace by regular roundsmen; and contracts for the provision of accommodation, transport, catering or leisure services, where the supplier undertakes, when the contract is concluded, to provide these services on a specific date or within a specific period.

These exemptions are quite narrow, and most contracts made between suppliers and consumers via a website for the supply of goods or services will be subject to the Distance Selling Regulations.

Regulations 7 and 8 of the Distance Selling Regulations set out the disclosure requirements.  There are slightly different rules affecting disclosures required under the different Regulations.

Under Regulation 7, in good time prior to the conclusion of the contract to which the Regulations apply, the supplier should provide to the consumer the following information:

- the identity of the supplier and, where the contract requires payment in advance, the supplier’s address;

- a description of the main characteristics of the goods or services;

- the price of the goods or services including all taxes;

- delivery costs where appropriate;

- the arrangements for payment, delivery or performance;

- the existence of a right of cancellation (except excluded cases);

- the cost of using the means of distance communication where it is calculated other than at the basic rate;

- the period for which the offer or the price remains valid; and

- where appropriate, the minimum duration of the contract, in the case of contracts for the supply of goods or services to be performed permanently or recurrently

Also under Regulation 7, and also in good time prior to the conclusion of the contract, the supplier should: inform the consumer if he proposes, in the event of the goods or services ordered by the consumer being unavailable, to provide substitute goods or services (as the case may be) of equivalent quality and price; and inform the consumer that the cost of returning any such substitute goods to the supplier in the event of cancellation by the consumer would be met by the supplier.

The information must be provided in a clear and comprehensible manner “appropriate to the means of distance communication used”.  In the context of websites, this means, in my view, that the information should be provided in writing on the website and should be clearly signposted for users.

Under Regulation 8,  the supplier must supply certain additional information to the consumer in writing (or “another durable medium which is available and accessible to the consumer”).  In principle, the information may in some circumstances be supplied after the contract has come into force.  However, in the case of distance contracts entered into via a website, it is difficult to see why it should not alway be supplied before the contract has come into force - particularly as a delay in supplying the information can lead to an extension of the cancellation period for the contract.  If you are a supplier and are considering supplying any of the information listed below after the conclusion of  contracts, you should look closely at the Distance Selling Regulations and take advice as necessary.

In any case, the additional information to be disclosed under Regulation 8 is:

- information about the conditions and procedures for exercising the right to cancel under the Distance Selling Regulations (including where a term of the contract requires (or the supplier intends that it will require) that the consumer shall return the goods to the supplier in the event of cancellation, notification of that requirement; and information as to whether the consumer or the supplier would be responsible under the Regulations for the cost of returning any goods to the supplier, or the cost of his recovering them, if the consumer cancels the contract under regulation; and in the case of a contract for the supply of services, information as to how the right to cancel may be affected by the consumer agreeing to performance of the services beginning before the end of the seven working day period).

- the geographical address of the place of business of the supplier to which the consumer may address any complaints;

- information about any after-sales services and guarantees; and

- the conditions for exercising any contractual right to cancel the contract, where the contract is of an unspecified duration or a duration exceeding one year.

The first principle of data protection law is that personal data must be processed fairly and lawfully, and that one or more specified conditions must be met.

Perhaps the most important of those conditions affecting the collection and use of personal data via websites is:

“The data subject has given his consent to the processing.“  (Data Protection Act 1998, Schedule 2, paragraph 2)

This raises the question of when a child can be taken to have consented to the processing of his or her personal data.

The DPA 1998 does not itself explicitly deal with the issue of obtaining consent from children.  However, the Information Commissioner has written:

“Websites that collect information from children must have stronger safeguards in place to make sure any processing is fair. You should recognise that children generally have a lower level of understanding than adults, and so notices explaining the way you will use their information should be appropriate to their level, and should not exploit any lack of understanding. The language of the explanation should be clear and appropriate to the age group the website is aimed at. If you ask a child to provide personal information you need consent from a parent or guardian, unless it is reasonable to believe the child clearly understands what is involved and they are capable of making an informed decision”  (The Data Protection Good Practice Note: Collecting personal information using websites).

So, privacy policies should be extra-prominent and extra-clear.  A very young child may never be able to give adequate consent; whereas, an older child may be able to give adequate consent in many different circumstances.  The Information does go on to refer to a particular age threshold:

“The Act does not state a precise age at which a child can act in their own right. It depends on the capacity of the child and how complicated the proposition being put to them is. As a general rule, we consider the standard adopted by Trust UK (www.trustuk.org.uk) to be reasonable:  ‘TrustUK approved webtraders recognise children need to be treated differently from adults. They will not market their products in any way that exploits children, nor will they collect information from children under 12 without first obtaining the permission of a parent or guardian. They will not collect personal data about adults from children.‘”

There are particular pitfalls for the operators of social networking websites, other websites which publish user generated content, and websites that collect information that is passed on to third parties:

“There are certain practices that are likely to breach the Act, for example, collecting information about other people from children, and enticing children to reveal information to win a prize or similar. If you are going to disclose or transfer personal information collected from children to third parties, you need to have the explicit and verifiable consent of the child’s parent or guardian, unless you can be sure that the child really appreciates what is going on and the consequences of their actions.

If you want to publish a child’s personal information on the internet, you should usually get the verifiable consent of the child’s parent or guardian. Whether you need the parents’ or guardians’ consent for the publication, or that of the child, will depend on the circumstances, in particular, the child’s age and whether you can be sure the child fully understands the implications of making their information available on the internet.”

An obvious question arises: how can parental consent be verified?  The Commissioner states:

“If you need parental consent, you must have some way of verifying this. It will not usually be enough to ask children to confirm their parents have agreed by using a mouse click. If you need parental consent but decide that verifying the consent will involve disproportionate effort, you should not carry out your proposed activity.”

There are a wide range of methods which may be used to verify parental consent, some of which are stronger than others.  For example, you might ask for a nominal credit card payment to be made before the child can access the relevant functionality, or you might telephone parents to verify consent.

Note: there are is a dedicated US law concerning the online collection of children’s personal data.  The Children’s Online Privacy Protection Act of 1998 (COPPA) applies to commercial websites that are directed at children under 13 or, even if not so directed, knowingly collect information from children under the age of 13.  The most far-reaching provision of COPPA requires that such websites must, before collecting, using or disclosing personal information from a child, obtain verifiable consent from the child’s parent.  This is why many US-orientated websites prohibit children under 13 from registering and using the website.

Many contracts, and the vast majority of professionally-drafted contracts, contain what is known as a “choice of law” clause. Choice of law clauses specify the law that will be used to interpret the contract.

Choice of law clauses and choice of jurisdiction clauses (sometimes called choice of forum clauses) must be distinguished. Whilst choice of law clauses relate to the law that will be used to interpret a contract, choice of jurisdiction clauses specify the courts (or other decision making bodies) that will resolve disputes arising under the contract. For example, a contract could specify that it should be interpreted in accordance with English law, whilst at the same time granting exclusive jurisdiction to the courts of Germany to resolve disputes arising under the contract.

Like many other kinds of contractual clause, choice of law clauses are subject to a certain amount of judicial interference.

This note focuses upon the ways in which the English courts will interfere with choice of law clauses.

Some types of law will regulate contractual relations before the English courts irrespective of an express choice of law. For example, the following pieces of legislation may apply in whole or part to contracts which relate to England and Wales but which expressly choose another governing law:

• Competition Act 1998
• Unfair Contracts Terms Act 1977
• Unfair Terms in Consumer Contracts Regulations 1999

The ways in which the English courts will interfere with a choice of law clause depend to an extent upon whether the contract is a consumer contract. For example, the Unfair Contract Terms Act 1977 (UCTA) will apply to contracts that are not governed by English law where it appears to the court that the choice of law clause has been used for the purpose of avoiding the effects of UCTA, or where one of the parties is a UK consumer who took the steps necessary to enter into the contract in the UK. Note, however, that the UCTA rules on excluding and limiting liability do not apply to international supply (of goods) contracts.

National consumer protection measures may also apply more generally by virtue of the Rome Convention (which has been incorporated into English law via the Contracts (Applicable Law) Act 1990). Article 5(2) of the Convention provides:

“a choice of law made by the parties shall not have the result of depriving the consumer of the protection afforded to him by the mandatory rules of the law of the country in which he has his habitual residence:

- if in that country the conclusion of the contract was preceded by a specific invitation addressed to him or by advertising, and he had taken in that country all the steps necessary on his part for the conclusion of the contract, or

- if the other party or his agent received the consumer’s order in that country, or

- if the contract is for the sale of goods and the consumer travelled from that country to another country and there gave his order, provided that the consumer’s journey was arranged by the seller for the purpose of inducing the consumer to buy.”

Where there is no express choice of law in a contract, the courts may still determine that there has been an implied choice of law if the circumstances warrant such a finding. For example, where a contract contains a choice of jurisdiction clause but no choice of law clause, then the law of the chosen jurisdiction may be deemed to apply. References to other national laws in a contract may also have an effect.

Where the courts are unable to identify and express or implied choice of law, the usual rule is that the governing law will be that law that is most closely connected to the contract. Article 4(2) of the Rome Convention provides:

“… it shall be presumed that the contract is most closely connected with the country where the party who is to effect the performance which is characteristic of the contract has, at the time of conclusion of the contract, his habitual residence, or, in the case of a body corporate or unincorporate, its central administration. However, if the contract is entered into in the course of that party’s trade or profession, that country shall be the country in which the principal place of business is situated or, where under the terms of the contract the performance is to be effected through a place of business other than the principal place of business, the country in which that other place of business is situated.”

Note, however, that there are a number of exceptions to this general rule.