IT and Ecommerce Providers beware

Posted: Tuesday, 29 November 2011 @ 17:32
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 aware of.

Of course, all businesses have things to watch out for but arguably e-commerce business has more to watch out for than most. As an adviser, often to the uninitiated, into the “e” world, clients will rely on their web developer or IT provider to alert them to 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 there is potential for a negligence claim. If you promote yourself as an e-commerce solutions provider or a website developer then it is very likely that it is reasonable for your clients to rely on you for all relevant advice.

So what are the legal issues you might be expected to tell clients about?

Information requirements

The information which a website operator has to provide varies with the type and purpose of the website there is a minimum of information which all websites have to display. Beyond that the detail depends on whether the operator is a company, whether the site is selling or marketing goods or services and whether contracts are concluded online. Some of the regulations concerning information provision overlap, but they can also vary slightly in their requirements. Download a copy of our Website Owners: Legal Requirements Checklist.

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, and other details about, the trading body, a description of the products or services offered, complete price and costs, delivery or performance arrangements, any applicable cancellation rights and how to exercise them.
  • 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 and conditions must be capable of being downloaded and stored and there should be an “I accept” button for buyers to confirm they accept the conditions of sale before the contract is concluded.
Software and other intellectual property licences
  • You obviously need to ensure you have the right to use all you do! (If the client provides software or other intellectual property such as photos, designs, logos etc for you to use - get an indemnity).
Don’t underestimate the impact of this issue. Owners of software and other rights such as Microsoft, Getty Images and so on are now regularly suing small businesses for, literally, thousands 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. They will need to be aware of this if hosting their site offshore and be wary of businesses with, for example, US contacts, subsidiaries etc.

Your clients might also expect you to advise them on data protection or privacy policy and data gathering rules. Such documents can help your clients comply with not only data protection, but also the various information provision requirements mentioned above. Our advice is not to offer advice yourself – either direct them to their own lawyers or have a privacy policy and any other documents worded for them through your lawyers.

Accessability/disability discrimination 
Of course to maximise the commercial impact of a website you want to make it as accessible as possible to visitors sing technology with varying degrees of sophistication and various devices including mobile phones etc. There is also a legal obligation to provide access to the disabled including those with mobility or sensory disabilities. For further information on this topic see our article The effects of the DDA on web designers and owners.

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

Website 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 a worthwhile investment to make sure it is right.
  • The specification for a particular project should be included in a schedule that you attach to the agreement. According to the complexity of the project, you might include a development timetable, stage payments and acceptance procedures.
  • If your client provides the content, you should have a clause to indemnify you (as someone assisting in its 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 “do your best” and allow downtime   for scheduled maintenance etc.
  • 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.
For more information, see our Web hosting agreement fact sheet.

    Contact Cousins Business Law for advice on this topic. 

    Article updated 3rd October 2011

    For free advice on this topic please call us on 0845 003 5639.

    Blog by Sue Mann
    Sue is an experienced commercial solicitor based in Birmingham from where she helps businesses all over the country advising on, drafting, and reviewing business contracts and commercial agreements. View profile
    Call Sue on +44 (0)121 246 4437 or by email
    This blog 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 telephone consultation to discuss your particular circumstances.


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    Thank you. Your response is great, very straight to the point! Hopefully this will bring an end to the matter. I will certainly be recommending your services as I am very impressed with the prompt dealing of this matter.
    Janet Burbidge

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