Website Law

Website legal documents are like vitamins: you know they’re good for you, but you probably don’t know exactly what they do.  With a bit of research you could find out what they do - but, let’s face it, even lawyers find legal research a little boring.

There are legal aspects to all websites.  Legislation requires that specific categories of information be disclosed on most websites.  There are procedural hoops that some kinds of website must jump through.  The law also regulates the kinds of content that can be published on a website, and controls the legal nature of the publication itself.

Legal documents on a website can help deal with these issues in various ways.

A well-drafted website legal notice, policy or terms and conditions document can (amongst other things):

• help a webmaster to comply with his or her legal disclosure obligations
• ensure that the webmaster does not improperly abridge customers’ (especially consumers’) rights
• ensure that website content is licensed to users on an appropriate basis
• limit (or at least attempt to limit) the website owner’s liability in relation to the website
• set out the legal basis upon which products and services are supplied to customers
• remind a website owner of the procedural obligations that the law places upon him or her
• show that the webmaster is serious about legal compliance (important from a marketing perspective)

So, what legal documents do you need for your website?

In considering the appropriate documentation for a website, I usually differentiate between:

• the use of the website
• the sale and supply of products and services
• the collection and processing of personal data

All websites should have some kind of terms and conditions governing the use of the website.  See, for example, the range of website terms of use at Website Contracts.  At a minimum, the terms of use should deal with basic disclosure obligations, include a disclaimer of liability, and provide for the licensing of the website content to users.  Documents fulfilling these functions have many different names.  For example, they may be called terms of use, terms and conditions, terms and conditions of use, website terms, website legal notices, disclaimers, and so on.

Websites that sell anything - goods, services or licences - must also include terms and conditions governing the sale.  Where customers are consumers, the terms and conditions must comply with applicable consumer protection legislation.  Where all customers are businesses, there is greater freedom of contract.  Again, the nomenclature is not exact.  Documents governing the sale of products may be called terms and conditions of sale or terms of supply or simply terms and conditions.  Documents governing the supply of services may be called terms of service, terms of business or service agreements.  See for example: ecommerce terms and conditions.

Data protection legislation (as interpreted by the Information Commissioner) provides that website owners must disclose specific categories of information to users.  For example, they must disclose details of what data is collected, how it will be used, and how it will be kept secure.  Generally speaking, websites that process personal data should include a privacy policy for the purposes of making these disclosures.  Privacy policies can also be called privacy statements or privacy notices - or more rarely data protection policies, statements or notices. See: website privacy policy.

Whilst terms governing website use and terms governing sales can be incorporated into a single general terms and conditions document, the (non-contractual) privacy policy should be kept separate. 

All online traders in the UK and wider EU should know about the right to cancel distance contracts available under the Distance Selling Directive.

This Directive was implemented in the UK by the Consumer Protection (Distance Selling) Regulations 2000 (the “Distance Selling Regulations”), which came into force on 31 October 2000.  The Regulations were subsequently amended by the Consumer Protection (Distance Selling) (Amendments) Regulations in 2005.

The Distance Selling Regulations apply to most contracts between suppliers and consumers made via a website for the supply of goods and services.  See Distance Selling Regulations: disclosures for the exceptions.

The rules dealing with a consumer’s right to cancel are covered by Regulations 10 to 13.

The right to cancel

Regulation 10 gives the consumer a right to cancel a distance contract, provided the consumer gives a notice of the cancellation in writing to the supplier within the cancellation period.  Once this notice is given, the contract is treated as if it had never been made. Hand delivery, postal delivery, facsimile or email are all acceptable modes of delivering a cancellation notice.

Informational requirements

Pursuant to Regulations 7 and 8, the supplier must “provide to the consumer in writing, or in another durable medium which is available and accessible to the consumer” certain information, which includes “the existence of a right of cancellation except in the cases referred to in Regulation 13” (referred to in this post as the “cancellation information”).

See Distance Selling Regulations: disclosures for full details of the cancellation information.

Factors affecting the length of the cancellation period

The length of the cancellation period is determined by:

whether and when the supplier provides the cancellation information; and
whether the contract is for the supply of goods or the supply of services.

Cancellation period in contracts for the supply of goods

“The cancellation period in case of contracts for the supply of goods begins with the day on which the contract is concluded” (Regulation 11(1)), and the end date depends upon the circumstances.

The cancellation information should be provided “(a) prior to the conclusion of the contract, or (b) thereafter, in good time and in any event … at the latest at the time of delivery where goods not for delivery to third parties are concerned” (Regulation 8(1)).

There are 3 main scenarios.

Scenario 1:

In scenario 1, where the supplier provides the cancellation information in time, then “the cancellation period ends on the expiry of the period of seven working days beginning with the day after the day on which the consumer receives the goods” (Regulation 11(2)).

So, where an e-commerce website has properly drafted T&Cs of sale and accordingly provides the proper information, the consumer will have a 7 working day cancellation period from the time of the delivery of the goods.

Scenario 2:

Scenario 2 covers the situation where the supplier fails to supply the cancellation information in good time (see above), but does provide the cancellation information “within the period of three months beginning with the day after the day on which the consumer receives the goods”.

In this case, “the cancellation period ends on the expiry of the period of seven working days beginning with the day after the day on which the consumer receives the information” (Regulation 11(3)).

Scenario 3:

The last scenario applies where the supplier has not provided the consumer with the cancellation information at all.

In this case “the cancellation period ends on the expiry of the period of three months and seven working days beginning with the day after the day on which the consumer receives the goods.” (Regulation 11(4)).

In other words, even if the consumer has not been advised about his or her right to cancel, the cancellation period expires after three months and 7 working days following the receipt of the goods.

Cancellation period in contracts for the supply of services

The applicable cancellation period for contracts for the supply of services is very similar to that for the supply of goods, and is governed by Regulation 12.

Here, the cancellation information should be provided “(a) prior to the conclusion of the contract, or (b) thereafter, in good time and in any event … during the performance of the contract…” (Regulation 8(1)).

The main difference in the calculation of the cancellation period in the case of a contract for services is that the cancellation period may come to an abrupt end if the provision of the services has commenced, or alternatively if the services have been completed.

Scenario 1

In scenario 1, where the supplier provides the cancellation information “on or before the day on which the contract is concluded … the cancellation period ends on the expiry of the period of seven working days beginning with the day after the day on which the contract is concluded” (Regulation 12(2)).

However, “unless the parties have agreed otherwise, the consumer will not have the right to cancel the contract by giving notice of cancellation … in respect of contracts … for the supply of services if the performance of the contract has begun with the the consumer’s agreement – before the end of the cancellation period referred to in Regulation 12(2); and after the supplier has provided … [the cancellation information]” (Regulation 13(1)(a)).

Scenario 2

In scenario 2, where the supplier provides the cancellation information to the consumer “within the period of three months beginning with the day after the day on which the contract is concluded, the cancellation period ends on the expiry of the period of seven working days beginning with the day after the day on which the consumer receives the information.” (Regulation 12(3)).

Note that Regulation 13(1)(a) may also apply here, where performance of the contract begins after the provision of the cancellation information.

Alternatively, under Regulation 12(3A), “where the performance of the contract has begun with the consumer’s agreement before the expiry of the period of seven working days beginning with the day after the day on which the contract was concluded and the supplier has not … [supplied the cancellation information] … on or before the day on which performance began, but provides to the consumer … [the cancellation information] … in good time during the performance of the contract, the cancellation period ends - (a) on the expiry of the period of seven working days beginning with the day after the day on which the consumer receives the information; or (b) if the performance of the contract is completed before the expiry of the period referred to in sub-paragraph (a), on the day when the performance of the contract is completed.”  This means that the consumer has a cancellation period of 7 working days from the time the consumer receives the cancellation information, unless the provision of the services has started with the agreement of the customer.  In that case, the cancellation period ends within 7 days of the consumer receiving the information, or when the contract has been performed.

Scenario 3

In scenario 3, where the supplier does not provide the consumer with the cancellation information at all, and the provision of the services has not yet begun, “the cancellation period ends on the expiry of the period of three months and seven working days beginning with the day after the day on which the contract is concluded.” (Regulation 12(4)).

Other exceptions to the right to cancel

The exceptions to the right to cancel are governed by Regulation 13.  (Note that I have dealt with Regulation 13(1)(a) above, and so will ignore this provision for the purposes of this section.)

Under Regulation 13(1), “unless the parties have otherwise agreed”, the consumer will also not have the right to cancel “in respect of contracts:

(b) for the supply of goods or services the price of which is dependent on fluctuations in the financial market which cannot be controlled by the supplier;

(c) for the supply of goods made to the consumer’s specifications or clearly personalised or which by reason of their nature cannot be returned or are liable to deteriorate or expire rapidly;

(d) for the supply of audio or video recordings or computer software if they are unsealed by the consumer;

(e) for the supply of newspapers, periodicals or magazines; or

(f) for gaming, betting or lottery services.”

Other information

Where the right to cancel exists, the supplier must also advise the consumer, if the consumer needs to return the goods to the supplier (Regulation 8(2)(b)(i)), and who is to be responsible for the cost of returning the goods to the consumer (Regulation 8(2)(b)(ii)).

Issues of jurisdiction are important to online traders, not least because of the transnational character of many internet contracts.

Private international law (also known as conflict of laws) is the legal subject concerned with jurisdictional questions – i.e. questions of where court proceedings may be brought.

Private international law is international inasmuch as it is concerned with cross-border legal disputes, but – because there are no real private international courts – it must be considered from particular national perspectives.

This post is intended to introduce some of the issues of private international law in the context of internet contracts from the perspective of English law.  It is not intended to be comprehensive: it does not consider the perspectives of other countries’ courts; and it does not consider other causes of action (e.g. tort).  Indeed, because of the complexity of the law in this area, it only touches upon the main issues of English private international law relating to disputes about online contracts.  If you need specific advice on this subject, you should always speak to a suitably qualified lawyer.

The question of where court proceedings are brought is conceptually distinct from the questions of governing law (see Internet contracts and applicable law) and the enforcement of a judgment issuing from court proceedings.  In other words, proceedings may in principle be brought in one jurisdiction and a judgment issuing from those proceedings may be enforced in another.

Sources of law

The main sources of English law on this subject:

• Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (aka the Brussels Regulation).
• The Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.
• English common law.
• The Civil Procedure Rules.

Applicability

The rules that the English courts will apply in considering questions of jurisdiction in relation to a contractual dispute depend upon the domicile of the defendant.

• Contractual disputes involving a defendant domiciled in the EU will be subject to the Brussels Regulation.
• Contractual disputes involving a defendant domiciled in the EFTA (excluding Lichtenstein) will be subject to the Lugano Convention.
• Contractual disputes involving other defendants will be subject to the rules of English common law.

Default jurisdiction under the Regulation and Convention

Where the Brussels Regulation or the Lugano Convention applies, then the defendant may usually only be sued in: (a) the courts of his domicile; or (b) in the courts of the place of performance of the obligation in question (presumed to be the place or intended place of the delivery of goods or the supply of services in a contracting state).

There are however a number of exceptions to this general rule, including where:

• the dispute is subject to a contractual jurisdiction clause;
• the dispute concerns a contract classes as a consumer, insurance or employment contract.

I consider contractual jurisdiction clauses below; such clauses aside, the most important exception relates to consumers.

Under the Regulation and Convention a consumer contract is subject to special rules where:

“(a) it is a contract for the sale of goods on instalment credit terms; or

(b) it is a contract for a loan repayable by instalments, or for any other form of credit, made to finance the sale of goods; or

(c) in all other cases, the contract has been concluded with a person who pursues commercial or professional activities in the Member State of the consumer’s domicile or, by any means, directs such activities to that Member State or to several States including that Member State, and the contract falls within the scope of such activities.” (Article 15(1), Brussels Regulation; there is a parallel provision in the Lugano Convention).

Irrespective of contractual jurisdiction clauses, consumers under such contracts can sue, and can only be sued, in the state of their domicile (generally speaking).

But when does a person pursue “commercial or professional activities” in a particular Member State?  When does a person by “any means” direct “commercial or professional activities” to a Member State or to “several States including that Member State”?  The answers to these questions are not at all clear.

A website published by a UK publisher in Italian and advertised in Italian media selling goods in Euros may obviously be considered to be directed at Italy.  On the other hand, a website published by an Italian publisher in Italian and not marketed in any way in the UK selling goods in Euros would probably not be considered to be directed at the UK.  (Note, however, that there are different interpretations of Article 15.)

Ways to reduce the risk of becoming subject, under the Regulation or Convention, to the jurisdiction of a particular country’s courts, may include: using national flags to indicate to whom a website is directed; limiting the currencies and languages used on a website; and using technical filtering to prevent consumers in the relevant jurisdiction from using the website or purchasing the products and services offered on the website.

Common law

Where an English claimant wants to bring proceedings against a person domiciled overseas in a non-EU, non-EFTA jurisdiction, the usual method is to obtain permission to serve proceedings out of the jurisdiction (there are other ways).

In order to obtain permission to serve out, the claimant wishing to bring proceedings for breach of contract will need show, first, that the claim is permissible under the Civil Procedure Rules.  Rule 6.20(5) provides:

“…a claim form may be served out of the jurisdiction with the permission of the court if … a claim is made in respect of a contract where the contract –

(5) (a) was made within the jurisdiction; (b) was made by or through an agent trading or residing within the jurisdiction; (c) is governed by English law; or (d) contains a term to the effect that the court shall have jurisdiction to determine any claim in respect of the contract.

(6) a claim is made in respect of a breach of contract committed within the jurisdiction.”

Many contractual claims will be able to surmount this hurdle.  In an internet context, of course, the questions of where a contract was made, and where it was breached, may be contentious.

Second, the claimant will have to show that England and Wales is the proper place to bring the claim (i.e. the forum conveniens).  This involves balancing the suitability of England and Wales against the suitability of the other potential forum or forums.  Consequently, the English courts will usually have more discretion to refuse jurisdiction in the case of a defendant domiciled outside Europe.

Choice of jurisdiction

In a contractual dispute it is common for the parties to have elected for disputes to be subject to the jurisdiction of the courts of a particular state.

The parties to a B2B contract are generally free to choose in which jurisdiction a dispute may be litigated (although there are a few exceptions).

Where the Brussels Regulation or Lugano Convention applies, consumer contracts (as defined in the Regulation and the Convention) are different.  Under the Regulation and the Convention, jurisdiction clauses can only add to consumers’ rights to litigate, not subtract from them.  So, if a consumer has a right to bring proceedings against a supplier under the rules discussed above, that right cannot be removed by means of a contractual jurisdiction clause.  Similarly, where a supplier is obliged to bring proceedings against a consumer in the consumer’s jurisdiction of domicile, then that obligation cannot be altered by a choice of jurisdiction clause.