Website Law

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.

The preponderance of the laws that regulate commercial conduct online are the same laws that regulate commercial conduct offline: contract law, the law of torts, commercial law, consumer law,  intellectual property law, and so on.

If you know a little (or a lot) about publishing law, you know a little (or a lot) about digital publishing law.

But doing business on the internet involves added complexity and added uncertainty.   Added complexity, because a new layer of laws veils the legal backcloth.  Added uncertainty, because the new and evolving technologies may not yet have been digested by the system of legal precedent - and by the time a recognisable body of jurisprudence about a technology has emerged, the technology may be obsolescent.

Complexity, uncertainty and evolution are three causes of widespread non-compliance with the law.

The extent of non-compliance should not be underestimated.  For example, the E-commerce Regulations demand, with the inevitable exceptions, that e-retailers must make available to their customers “appropriate, effective and accessible technical means” allowing the customer to identify and correct input errors before placing an order.  This may be dealt with by means of a “confirm your order” page: but anyone with a passing familiarity with online shopping will know that as often as not there is no pre-order correction procedure.

Some fairly common internet practices are outlawed. For instance, many websites will send marketing emails to users who do not opt-out – when in some cases they should only be sending the emails to users who opt-in.

One reason why online compliance is particularly important is that anyone can conduct an impromptu audit of your website – and potentially find you wanting.  This can be embarrassing.

For example, whilst writing this I visited the website of one of the most prestigious law firms in the world.   Under the Privacy and Electronic Communications (EC Directive) Regulations 2003, a person using a website that serves cookies should, amongst other things, be “provided with clear and comprehensive information” about the cookies.  (Cookies are sent by a web server to a web browser and then sent back to the server each time the browser accesses that server, enabling the server to recognise and track the browser.)

The law firm website uses site-wide session cookies and instructs Google to serve four persistent Google Analytics cookies to the user.  But the legal notice on the firm’s website says that the website doesn’t use cookies, other than session cookies in one particular part of the website.

I doubt whether the firm in question would welcome publicity about this kind of (albeit technical) non-compliance.

But there is more than just embarrassment at stake if you fail to comply with the laws relating to digital publishing.  Contracts of sale that can be rescinded at the option of your customers; Trading Standards investigations and prosecutions; investigations and adverse decisions of the Information Commissioner; and civil claims by customers: the risks are varied, and non-compliance can be expensive.

Because of regular changes in the law relating to the internet and the technologies from which it is built, digital publishers should ensure not only that they have the expertise to identify the issues, but that they regularly update that expertise and regularly audit their compliance.

In yesterday’s post, I considered the basic legal information that most commercial websites are required by English law to disclose. Many of these basic disclosure requirements are contained in the Electronic Commerce Regulations (EC Directive) Regulations 2002 (the “Ecommerce Regulations”).

The Ecommerce Regulations also contain a number of (widely ignored) provisions that apply where contracts are entered into online.

This post considers those provisions. (It does not, amongst other things, consider the requirements of the Distance Selling Regulations which will affect consumer contracts concluded online.)

Technical steps to conclude a contract

Prior to the conclusion of an electronic contract, the service provider must provide to the service recipient in a clear, comprehensible and unambiguous manner details of the different technical steps to follow to conclude the contract.

The easiest way to do this is to include, somewhere on the website – e.g. in the legal documentation – a step-by-step guide to the contracting process.

Filing and accessibility of contract

Prior to the conclusion of an electronic contract, the service provider must tell the service recipient in a clear, comprehensible and unambiguous manner whether or not the concluded contract will be filed by the service provider and whether it will be accessible to the service recipient.

Given that online T&Cs may be regularly amended, the simplest way to deal with this requirement is to state, in the T&Cs, that the contract will not be filed and therefore may in inaccessible!

Correcting input errors

Prior to the conclusion of an electronic contract, the service provider must provide to the service recipient in a clear, comprehensible and unambiguous manner details of the technical means for identifying and correcting input errors prior to the placing of the order. The service provider must also actually provide such appropriate, effective and accessible technical means, prior to the placing of the order.

The usual way to fulfil this requirement is to have a pre-order web page detailing the information submitted and asking the customer to confirm whether they would like to amend that information or place the order on the basis of that information.

Languages

Service providers must also, strangely, provide service recipients with information about the languages offered for the conclusion of the contract.

This requirement can be met by stating in the website legal documents that the contract is only available in Esperanto (or whatever).

Codes of conduct

A service provider must indicate which relevant codes of conduct he subscribes to – and give information on how those codes can be consulted electronically.

T&Cs: storage and reproduction

Where the service provider provides terms and conditions applicable to the contract to the recipient, the service provider shall make them available to him in a way that allows him to store and reproduce them.

In my view, an HTML page or .pdf file can be stored or reproduced with ease, and so should fulfil this requirement. However, a cautious website operator might include a “print now” button on the terms and conditions.

Acknowledgement of order

Where a recipient of the service places his order through technological means, a service provider must acknowledge receipt of the order to the recipient of the service without undue delay and by electronic means.

However, the acknowledgement of receipt may take the form of the provision of the service paid for where that service is an “information society service” (e.g. a subscription to a website).

Exceptions

Where a contracts is concluded exclusively by email, the only requirements that apply are those set out under the “T&Cs: storage and reproduction” heading.

Businesses contracting online with other businesses may agree that the above provisions – other than those set out under the “T&Cs: storage and reproduction” heading - do not apply.