Website Law

I’ve just finished working on a new template terms and conditions of use document for marketplace-type websites. This process has not been as straightforward as it should have been. Both the Ecommerce Regulations and the Distance Selling Regulations are poor fit for this kind of website, because of the range of different contractual relationships that this kind of website can give rise to.

When considering this kind of site, we need to distinguish between:

• the website operator
• buyers
• sellers
• casual users

The website operator has distinct legal relationships with buyers, sellers and other users. In addition, each time a sale occurs, a buyer will contract with a seller. Usually, the website operator will not be a party to contracts of sale entered into via the website by buyers and sellers.

Clearly, the Distance Selling Regulations will apply to sales by a seller acting in the course of a business to buyer who is a consumer. Website operators may want to assist sellers in complying with the Distance Selling Regulations in this respect, perhaps by supplying terms and conditions of sale that the seller can use. However, operators will want to avoid any responsibility for sellers’ legal compliance, and may therefore want to refrain from offering this kind of help, notwithstanding that that may lead to a lower level of legal compliance.

What is uncertain is whether the Distance Selling Regulations will apply to the operator-seller relationship in the situation where the seller is not acting in the course of a business. Can a seller be a consumer? The common sense definitions of these words would suggest not, but the legal definition of “consumer” has proven flexible in the past. A cautious website operator may want to either prohibit consumers from becoming sellers, in order to avoid this problem, or alternatively ensure that all the contract provisions that will apply between the operator and sellers are consumer law-compliant.

Another issue concerns the application of the Distance Selling Regulations to the operator-buyer relationship, and the point at which they might apply. The definition of “distance contract” in the regulations suggests that they apply from the point of registration in respect of the contract with the operator (as well as at the point of sale in relation to the contract with the seller) but many of the provisions in the Regulations (notably those concerned with the “cooling off” period specified by the Regulations) only make sense in respect of contracts where the consumer is paying money to the supplier.

Turning to the Ecommerce Regulations, it is clear that the provision of the website services by the website operator to both sellers and buyers in relation to sales made via the website will be “Information Society Services” within the meaning of the Ecommerce Regulations. Again, what is less clear is at what point the procedural obligations under the Ecommerce Regulations become operable – at the point of registration, at the point of purchase of a product listing (where relevant), at the point of sale, or at multiple points?

Another question is this: can a seller be considered to be a supplier of “Information Society Services” within the meaning of the Regulations?

So as to avoid clogging up the template with repetitive procedural requirements, I made a number of assumptions in the drafting of the template: (i) that the Distance Selling Regulations will not apply to the operator-buyer relationship (because the buyer is not paying the operator except to the extent that the operator is acting as a payment processor on behalf of the seller); (ii) that sellers will never be treated as consumers (arguably, selling is the very antithesis of consuming); (iii) that sellers will not be considered to be suppliers of “Information Society Services” (because it is the operator providing those services); and (iv) that the operator’s obligations vis-à-vis both the seller and the buyer under the Ecommerce Regulations apply at the point of registration. Of course, this approach may not the right approach for any given website.

You can see the fruits of this labour on Website Contracts.

This brief FAQ contains answers to some of questions I get asked on a daily basis relating to website terms.

What is the difference between T&Cs, terms of use, and disclaimers?

In the context of websites, these are different names for often similar – and sometimes identical – documents.

“T&Cs” or “terms and conditions” may apply to any kind of contractual arrangement, but if you see them on a website they will usually contain some terms relating to the use of that website.

Strictly, a “disclaimer” is a document disclaiming liability in relation to something. However, this title is often used for documents that do more than just disclaim liability. Again, if you see a disclaimer on a website, it’s likely to disclaim the owner’s liability in relation to the website.

I prefer to call the legal notice that is concerned with the use of a website “terms of use”. However, I’m not very consistent about this!

What is the point of having terms of use?

On a basic website, terms of use usually do at least 3 things.

First, they specify the basis upon which the website may be used. In other words, they contain an express grant of a licence of the IP rights in the website.

Second, they disclaim liability in relation to the use of the website.

Third, they help the website owner fulfil any legal disclosure obligations.

In more sophisticated websites, the terms of use have to cover a great deal more ground (e.g. membership terms, subscription payments, etc).

Will a good disclaimer protect me from lawsuits?

Possibly, but never completely.

Do I have to put my name on the website?

If the website is owned by a company or LLP registered in the UK, then yes.

If the website is subject to the Ecommerce Regulations, Distance Selling Regulations or a similar piece of legislation you will also need to include the name of the owner. (If you make any money out of a UK website, that website is likely to be subject to those Regulations.)

Certain professional and industry codes of practice also require the inclusion of a name.

Do I have to put my address on my website?

If the website is owned by a company or LLP registered in the UK, then you need to put the address of that entity on the site.

In addition, if the Ecommerce Regulations apply you need to supply a “geographic address”.

Will a PO Box number do?

A PO Box is not, in my view, a “geographic address”.