IT and Ecommerce Providers beware

If you’re an e-commerce solutions provider or a website developer, there are now various aspects of law and regulation you need to be wary of.

Of course, all businesses have things to watch out for but arguably no business has quite so much to worry about as an e-commerce business. As an adviser, often to the uninitiated, into the “e” world, clients will rely on their web developer or IT provider to warn them of the things they need to consider - such as bandwidth, search engine, and even the law as it relates to websites.

As soon as somebody reasonably relies on a business for advice, that advice has to (a) be there and (b) be correct, otherwise a negligence claim is likely. If you promote yourself as an “e-commerce” business then it is almost certain that it is reasonable to rely on you for all relevant advice.

So what are the things you might be expected to tell customers about?

Trading Regulations

If you or your clients are selling via the web, trading regulations apply. It’s essential that you are aware of the requirements and make your clients aware too.

Here are some of the things that could impact on the design and structure of websites you might build:

There is a minimum information requirement for any business trading on-line. This includes the full address and name of the trading body and registered number.
There must be an acknowledgment of each order electronically (for more details, see our fact sheet ‘Making a contract on the web’)
On-line terms & conditions must be capable of being downloaded and stored and there should be an “I accept” button for buyers to confirm they accept your conditions of sale.

Software licenses

You obviously need to ensure you have the right to use all you do! (If the client provides software for you to use - get an indemnity).

Don’t underestimate the impact of this issue. Microsoft is now regularly suing small businesses for, literally, millions of pounds for any breach.

Data Protection

This is, of course, a large subject in itself but be aware to advise your clients that they cannot transfer data outside the EU without special arrangements. Be wary of businesses with for example US contacts, subsidiaries etc.

Your customers might also expect you to advise them on data protection policy and data gathering rules – our advice is don’t offer advice yourself – either direct them to their own lawyers or have a data protection policy worded for them through your lawyers.

In addition to your responsibility to advise the customer there are areas where you need to further protect your own business for example:

Web Developers - Make sure you have a website development agreement

You should have a mainly standard template agreement drafted for you - it can be re-used many times so is worth the money to make sure it is right.
The specification for a particular project should be included in a schedule that you attach to the agreement.
If your client provides the content, you should have a clause to indemnify you (as someone assisting in it’s publication) against any problem with it (e.g. illegality, breach of copyright, trademark etc)

Web Hosts - use a formal website hosting agreement

24/7/365 may well not be possible so confirm in it that you will just “do your best”.
Have a clause which excludes you from economic loss (e.g. loss of profit) caused by downtime.
Set out what the client has to look after in their systems to maintain the agreement.

Contact Cousins Business Law for advice on this topic.

This article is not intended to constitute legal advice, nor is it intended to be a complete and authoritative statement of the law, and what we say might be out of date by the time you read it. You should always seek legal advice to confirm whether or how any information in this article applies to your particular situation. We offer a free 30-minute telephone advice session to discuss your particular circumstances.

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