eCommerce - Tips and Traps (part 2)
eCommerce : I first blogged about this on 19 May and covered:
- Trap 1 - charge-back risk
- Trap 2 - unclear refund and return policies
- Trap 3 - attempt to exclude all warranties
- Trap 4 - unmet expectations Go to part 1.
This is part 2:
Trap 5 - uncertainty about whether a contract is formed
Key Questions:
1. Was it the clear intention of the parties to enter an Agreement?
2. Is it abundantly clear that the customer has consented to the Terms of an Agreement?
For there to be an Agreement the answers to questions 1 and 2 must be yes.
In my view it is generally not enough to have Terms and Conditions on your site. The issues are:
- Were the Terms and Conditions clearly brought to the attention of the customer prior to the formation of an Agreement?
- Has the customer indicated acceptance to an Agreement by clicking “I agree” or similar?
Again, the answers to both these questions must be yes.
Trap 6 - uncertainty about when a contract is formed with a customer
The general principle is that this is at the time of communication of acceptance of the offer (to purchase or sell).
The internet makes this difficult to nail down. Therefore, deal with this very clearly in your Terms and Conditions.
Is the Order a Customer places an acceptance of the offer of goods and services on your web site or is the Order an offer to purchase which you accept by processing the order?
Tip: Whichever one you choose, it should be:
- Clear to the customer
- Consistent across your web site
- Contained in your Terms & Conditions
Trap 7 - uncertainty about where a contract is formed with a customer
This is clearly related to Trap 6, but it can have significant implications as to what system of law then governs the relationship you have with your customer. The system of law then has significant implications on:
- The ease and cost on insisting on compliance with an Agreement; and
- The cost of or ability to obtain any court sanctioned remedies.
This is particularly important for merchants who are supplying internationally. Again, deal with this very clearly in your Terms & Conditions.