Distance Selling rules concerning contracts made online, by telephone, fax or email

The Covid-19 lockdown has seen many small businesses rapidly adapt their business models to distance selling in order to continue to trade, adopting either a model of pre-ordering with collection or full delivery services.

Orders can be provided by telephone, email and websites or, for many small businesses, through social media. But few will have had time to consider the legal implications of doing so.

There are several different pieces of legislation that apply to distance selling contracts including the Consumer Contract Regulations; the Provision of Service Regulations; and the Electronic Commerce Regulations.

The law applies to different businesses in different ways depending on the nature of the goods or services being sold, the manner in which they are sold (e.g. over the phone, online or by email) and how payment is to be made.

In particular, these Regulations set out very prescriptive details of the type and extent of information that needs to be provided when completing a contract at a distance, again, differing from business to business.

This includes information about how a consumer can cancel the contract and what costs they will incur if they need to return goods. For example, in some cases, there is a set ‘cooling off period’ of 14 days.  However, in order to start counting those 14 days, the consumer has to have been provided with a template cancellation form prescribed by the Regulations.

Apart from ensuring compliance with the Regulations, “distance selling” contracts also pose other issues that most small retailers will not have previously had to concern themselves with, but which could cause potential issues operationally and legally. Such as:

• When is the contract with the customer actually formed? Is it when the order is placed, or when the goods are to be collected?
• When does delivery actually take place? Can I leave it on the doorstep or do I need a signature?
• What if the customer starts to use the goods and then reports a defect?
• What if the customer rejects the goods when they arrive? Can I still charge for the delivery?
• Is the stock insured while it is being delivered by us to the customer?

As small businesses continue to adjust to this rapidly changing business economy and embrace the world of 'distance selling', we would recommend taking some time to understand the appropriate legal obligations and risks.

For advice and guidance on the information that you need to provide to customers or clients or on how to ensure your terms and conditions are fit for purpose please contact Matt Rowley in our Corporate and Commercial Team.