Online Businesses – Legal Issues

Ensure that your Online Business Remains Operational

Once you have set up an online business, it may feel as if the hard work has been done. If you have taken the time to ensure that the website is structured in a workable and secure way, then this may well limit your ongoing work; it does not eliminate the need to update continually and to remain abreast of legal and practical changes.

Legal Rules & Regulations

Entering into contracts online is an entirely different legal field to traditional, face to face contracts and anyone operating a business online should have at least a basic knowledge of e-commerce law.

One of the main regulations of which you should be aware is the Consumer Protection (Distance Selling) Regulations 2000. These regulations govern the information that you must pass to your customers, before they enter into an online contract with you. It is also essential that your customers are able to print off hard copies of the terms and conditions of the contract for future reference. All communications should also clearly state that this is a distance selling contract.

Similarly, the Ecommerce Regulations 2002 deal specifically with online businesses and how they should conduct their affairs. Although these regulations are extensive, the key principle is that you should ensure that your customer has all of the relevant information available on the website such as your postal address.

As of 1 January 2007, there have been additional requirements laid out in the Companies Act such as the need to state your company registration number online, as well as your registered address and details of any insolvency or winding up procedures in which the company may be involved.

The Data Protection Act 1998 applies to data that is held on individuals in electronic as well as hard copy format. Therefore, you need to ensure that all information you collect from your website is suitably protected from being read by an unauthorised source or being stolen. You are also obliged to provide customers with all of the details that you hold on them, if they make a request for this information.

During the order process, always allow your customers sufficient time to go back and correct any mistakes, before they ‘confirm’, as this will help prove that the contract is valid and binding. Similarly, you should acknowledge the receipt of the order at the earliest reasonable opportunity.

It is also worth noting that the distance selling regulations state that, in the absence of any agreement to the contrary, it is your duty as a seller to provide the goods within 30 days of the order being placed. A consumer when buying online has, by law, a seven-working-day cooling off period in which to cancel their orders.


 The legal regulations and implications of selling online are extremely complicated and far-reaching, so professional advice should always be sought;

 In particular, it is vital to ensure that you have the correct information available to your customers on the website such as contact details, etc;

 Distance selling regulations state that a customer has a seven-working-day cooling off period and that the goods should be delivered within 30 days of the order being placed.