Table of Contents
When you have an online business and sell goods, you must source the products beforehand unless you produce the products yourself. ECommerce business owners have many legal issues to consider when selling their products or services on their website, including legal obligations when sourcing products. It is essential to consider these when thinking about your business structure for your online store. Failure to do so could cause problems for small businesses when selling the products on the online store. For example, you could find you are in breach of contract with your online customers. This article will explain some legal considerations you need to know when sourcing products for your online business.
Business-to-Business Terms and Conditions
An essential legal consideration when sourcing products for your online business is that you have business-to-business (B2B) terms and conditions. It is often easy to focus on your eCommerce business terms and conditions for business to consumer. This is because, as an online business owner, you will naturally put effort into selling your products to make money. However, your business-to-business terms and conditions are essential when sourcing products for your online business from current suppliers and new suppliers. They will be the basis of the contracts you later form with suppliers. Alternatively, they may replace the need for any individual agreements.
Your business-to-business terms and conditions should include, for example:
- the obligations of your supplier for products;
- the law which applies to the terms and conditions;
- fees and payment terms;
- intellectual copyright issues where applicable; and
- liability issues.
Goods You Source Must Be Fit for Purpose
When you source products and product lines for your online business, a critical legal consideration is the quality of the goods. One critical legal requirement is that the goods you sell are fit for purpose and of a satisfactory quality. This means that claims about your products must be true. It also means your product’s quality must be what your online buyer will expect. So, if the product is new, the retail buyer should not expect wear and tear when they receive it.
Where your products are faulty, you are legally obliged to give your online customer a full refund within 30 days of the purchase date. In addition, if after six months from the online sale, your products prove faulty, you will have to issue a refund unless you repair or replace them. Therefore, it is essential that you source good quality products for your online business to avoid finding yourself in this situation. Not only will you lose out on sales if you source poor-quality products, but your online store’s reputation will be significantly damaged.
Also, as an online business, you must comply with other trading standards laws. One of these is that the products you sell online must be safe. Even if you source goods from an overseas manufacturer, they must still comply with UK safety standards. Where there is a product liability issue with your products, your online retail business could face a claim under the Consumer Protection Act for:
- breach of contract; or
- negligence.
Call 0808 196 8584 for urgent assistance.
Otherwise, complete this form and we will contact you within one business day.
Capability for Efficient Delivery of Goods
When you sell products online as a business, you must legally ensure you deliver them within a specific time frame. This is both without delay and within thirty days unless you make a different agreement with your customer regarding the delivery time. Therefore, if you allow your customers to order a product before you necessarily have the product in your inventory, ensure you can source this quickly. Online businesses that operate under a dropshipping supplier structure are particularly susceptible to experiencing this issue.
When sourcing products for your online business, choose a supplier who can deliver quickly and has ample availability. It is helpful to include a provision in your business terms and conditions about delivery and availability for sourcing products. That way, your supplier has rules to abide by, which can act as a safety cushion for your eCommerce business. Your supplier relationships are also positively impacted by these terms and conditions.
This checklist will help you identify areas in your business that may need further protection or assistance to ensure you are legally compliant.
Key Takeaways
When running an eCommerce business that sells a wide range of products online, you typically source your products first. When doing so, there are various legal considerations to note regarding the sourcing process when you source products for your online business. For example, ensure that you have business terms and conditions forming the contract between you and your supplier. It is also important to consider product quality and if the product is fit for purpose, as consumer laws apply to you regarding this when you sell online.
If you need help understanding the legal considerations you should be aware of when sourcing products for your online business, contact our experienced eCommerce lawyers as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
We appreciate your feedback – your submission has been successfully received.
