5 legal pitfalls to avoid in international e-commerce
Many a website owner running a business will be tempted to expand its clientele across the “World Wide Web”- after all what could be easier? No need to travel or set up local shops -all can be done from the comfort of the office and a friendly post office down the road. Or can it?? From a legal point of view, there are a number of key issues to consider:
1. Which law applies?
You may think that if you state in your business terms that English law will apply, that will be that. However, if you supply products or services abroad, there may be local laws that apply whether you like it or not. This is the case for instance when goods or services are sold to consumers ( as opposed to business customers). Consumers are considered to be more vulnerable and therefor have automatic rights. For instance, the right to change their mind after having entered into a contract over the internet. By law, they have a “cooling off period” and are entitled to a refund of the purchase price and initial delivery charges. In the UK, the cooling off period is 7 days from receipt of the products, but elsewhere in the EU it is 14 days. It may be different still outside the EU.
Bottom line: seek local law advice for each country to which you will be supplying products.
2. Restrict your customers to specific countries
3. Watch your delivery charges
Delivering abroad will be more expensive than in the UK. You will need to check the postal tariffs to each of the countries to which you will be supplying and specifically alert your customers to these extra charges in your terms of sale. You also need to check if there will be any special import duties and decide whether you will pay them or state that it is the responsibility of the customer.
4. Have clear terms of sale
All of the above points are best included in your ‘Terms of business’. It is surprising how many businesses do not use any at all and assume that all that is required is to state the price, line up a payment processor and away they go. However, here are a few things that you would typically cover in your Terms of Business:
- When will you deliver?
- What if the product is defective?
- What if the customer changes his/her mind?
- Are there any manufacturer’s guarantees or warranties?
- Are there any warnings on how to use the product?
- How do customers make a complaint?
- What is your maximum liability?
These are just a few suggestions. It is best to consult a lawyer for this at the outset. It will definitely be cheaper than waiting for things to go wrong!
5. Protect your brand
If you are concerned that your brand may be copied in the countries to which you supply your goods or services, you may wish to consider registering your trademark in those countries. For the EU, there is the option of the Community Trademark which saves you from registering your trademark in the individual EU countries. Alternatively, you may consider worldwide registration of your trademark. More information can be found at www.ipo.gov.uk and again it is best to consult a specialist intellectual property lawyer.