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Online contracts: when does a contract exist between a site and its customers? To be safe, it''s better for site owners to specify, says Dianne See Morrison.

Publication: New Media Age
Publication Date: 17-APR-03
Format: Online - approximately 2013 words
Delivery: Immediate Online Access

Article Excerpt
When it comes to the small print, it's not just consumers who find it intimidating and dense. As online trading continues to develop, a number of pieces of legislation have been drafted to set out the rules and regulations governing the space, most notably the Distance Selling Regulations of 2000 and the Electronic Commerce Regulations in 2002.

But it appears that not all companies are following the letter of the law. "I'd be surprised if everyone was fully compliant," says Graham Smith, a partner at the law firm Bird and Bird.

As last month's pricing mishap at Amazon's UK site demonstrates, e-commerce sites ignore the fine print at their peril. A technical glitch on Amazon UK meant that an iPaq H1910 handheld computer that normally retails for around [pounds sterling]300 was being displayed for [pounds sterling]7.32. Consumers flooded to the site, fuelled by emails from friends who'd discovered the error. One customer was said to have placed an order for 50 of the iPaqs. But in the end, Amazon didn't honour the price. Thanks to the careful crafting of its terms and conditions, it wasn't legally obliged to fulfill the orders.

With that in mind, one of the first considerations for any company wishing to trade online is to draft the terms and conditions of the site. These are also required under the Consumer Protection (Distance Selling) Regulations of 2002. This, explains Peter Stevens, a partner at Manches Solicitors, spells out the site's policy, typically when and where the contract is made, along with any applicable restrictions. In Amazon's case, it wrote in a clause stating that an order wasn't complete until the items had been dispatched by the company.

"A site needs to explain clearly, thoroughly and unambiguously, before the order is placed, how and in what languages the contract...

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