Online businesses: tell us who you are!

I am convinced that the most-broken piece of law known to humanity is the Business Names Act 1985. Probably not surprisingly: I remember when I taught business law to Legal Practice Course students (all graduates, and mostly law graduates) how very difficult it was to convey the concept of separate legal personality for a company. The common use of the word "company" to mean something more general than a company incorporated under the Companies Act (or otherwise) doesn't help. The result is that most of the businesses operating on-line don't identify themselves properly - a matter to which I have alluded in a few earlier posts on this site.

I don't want to spend my time advising clients on these basics: these are matters that they should be able to get right without consulting a lawyer, and from the lawyer's point of of view this is the sort of advice that shouldn't even be charged for. Anyway, writing a bill will probably take up more time than giving the advice. I'd rather be able to say to a client, take a look at my blog. Or at some other advisory website: start with the link above, to Companies House where the requirements of the Business Names Act are described (including the requirement that the identity of the proprietor of the business, or all the partners, is shown on websites). BERR offers advice. So does Businesslink. So do many other sources, so there is really no excuse for anyone getting it wrong. but still websites abound which have no identification other than the domain name, and people trade under business names without revealing who they are, and I doubt that trading standards departments do much about it.

However, this is not legal advice - merely information about what the law says. It's a complicated area where several different statutes intersect. If you are in any doubt about how the law applies to you, consult a lawyer!

Apart from the Business Names Act, and the Companies Act, there are other relevant pieces of legislation for e-commerce businesses, and I hope a brief outline of what these require might help someone, somewhere, sometime:

Electronic Commerce (EC Directive) Regulations 2002 ( SI 2002 No 2013)

The regulations use the notion of an “Information Society Service” to define their application. This catches every commercial website, not only those where goods are being sold or payment is being taken for services. The regulations are therefore of very wide application. They do not however apply to gambling or lotteries, or to certain activities of legal profession (including notarial services).

The “country of origin principle” applies to information society service providers: they are regulated by the laws of their home country and do not have to worry about the laws of other EC Member States. However, local laws still apply to terms of consumer contracts to protect the interests of consumers.

Minimum information

Service providers must:

• Give their name (including any trading names) somewhere easily accessible on site
• Provide email address (not just a “contact us” button)
• Give a geographic address (including registered office if a company)
• Give the company registration number (and place of registration - CA2006)
• State VAT registration number

Consumer Protection (Distance Selling) Regulations 2000 (SI 2000 No 2334)

These regulations apply in a wide range of situations where sales are made remotely, including mail and phone as well as on the Internet. They give rights for consumers, and impose obligation on traders to give information to their customers which therefore have an impact on what needs to go into terms and conditions for on-line transactions.

The regulations apply to contracts for sale of goods or provision of services between consumer and supplier under an organised distance sales or service provision scheme run by the suppler where supplier communicates with customer without ever coming face to face with them.

Exemptions cover:

• Land agreements (except short rental);
• Financial services;
• Vending machines etc;
• Pay-phones; and
  
• Auctions.

There are also partial exemptions for:

• Goods intended for everyday consumption delivered by roundsmen
• Accommodation, transport, catering, leisure services

The regulations require the trader to:

• Give consumers certain information prior to contract;
• Give consumers confirmation in writing of prior information and also some other information (especially cancellation rights);
• Repay sums paid by consumers within a certain time; and
• Perform contract within a certain time.

The first information requirement, which arises before the contract is made, is for what is called “prior information”. This comprises:

• Identity of supplier (and address where payment is required in advance)
• Description of main characteristics of goods or services
• Price of the goods or services inc all taxes
• Delivery costs where appropriate
• Arrangements for payment
• Arrangements for delivery or performance
• Existence of cooling-off period
• Cost of premium rate phone call (if any)
• Duration of validity of price or special offer
• Minimum duration of contract, if supply continuous or recurrent
• Whether supplier might substitute goods in event of non-availability
• Supplier will meet costs of consumer returning any unwanted substitute goods
  

Prior information must be given in a clear and comprehensible manner appropriate to means of distance communication used by consumer (so email or a notice on the website would appear to be good). In case of dispute, supplier must prove that information was provided in accordance with Regulations.

The information must also be confirmed to the consumer. Confirmation may be by email and must include a statement of right to cancel, and how to do this, who pays to return goods, address for complaints, etc.

The right to cancel is another matter, which I think ought to go into another posting.