Table of Contents
Beginning an eCommerce business can be an exciting venture that connects you to untapped markets. At the same time, many areas of law affect the eCommerce industry, ranging from the goods and services eCommerce businesses provide to how they store personal data. Therefore, before starting an eCommerce business, it is worth knowing what laws will affect your business operation. This article explains four legal points you need to know to run an eCommerce business.
1. Consumers Rights
Depending on whether your customer is a consumer or a business, different laws will apply, namely. For example, the Consumer Rights Act details your:
- consumers’ rights; and
- obligations if a dispute arises concerning those rights.
On the other hand, the Sale of Goods Act automatically applies to your business where your customers are businesses unless you change these rules through the details in your business terms and conditions.
This guide sets out how to set up, finance and grow an online business in the UK.
2. Information
Most eCommerce businesses must display specific information on their websites. Namely, the law requires you to display your:
- business name;
- physical location address;
- professional body details (if you are part of one); and
- your email address for your business.
The actual information your eCommerce business displays must comply with particular requirements. For example, information for your customers making a sale must be clear in terms of:
- prices;
- whether delivery and VAT apply;
- terms and conditions, which must be easy to access;
- who will carry out the contract with the customer, such as your company; and
- languages you offer.
Call 0808 196 8584 for urgent assistance.
Otherwise, complete this form and we will contact you within one business day.
3. Cookies and Direct Marketing
The Privacy and Electronic Communications Regulations 2003 (‘PECR’) affords privacy rights to individuals when your business communicates with them electronically.
If you plan to use cookies to analyse customer behaviour, you must specify this in your privacy policy. The policy should explain:
- your reasons for the cookies;
- what types of cookies you use, and
- if third parties use the cookie data and information about those third parties.
Otherwise, you could breach your privacy law obligations.
4. Dropshipping
Some UK eCommerce businesses engage in dropshipping. This is where the online store sells products to consumers but never physically has the items they sell. In other words, the business does not hold or handle the items at any point in the transaction. Instead, they buy the item from a third party and then send it to the online business customer.
A legal point you need to know about for an eCommerce business is that despite the nature of dropshipping, a company that engages in it still needs to comply with all eCommerce laws in the UK like any other eCommerce business. This includes paying taxes.
Key Takeaways
If you are planning on running a UK eCommerce business, there are many legal points to consider. Namely, you must consider:
- that your customers have rights regardless of whether they are consumers or businesses;
- your business’ legal obligations to be transparent about certain information;
- your business’ privacy policy obligations if it uses cookies to track consumer behaviour; and
- the laws regarding dropshipping.
If you need help setting up your eCommerce business, LegalVision’s experienced eCommerce lawyers can assist 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 for a low monthly fee. So call us today on 0808 196 8584 or visit our membership page.
We appreciate your feedback – your submission has been successfully received.
