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Trading Online - A Brief Guide to E-Commerce and Consumer Law

Selling to consumers online, or a mixture of in-store and online, involves a range of different consumer protection laws. The consequences of non-compliance can be severe, and this guide should give you a brief overview of what’s at stake.

The UK ecommerce market is one of the largest in Europe and is expected to continue its growth as more consumers choose to purchase products online. However, the exponential increase in the purchase of products ‘at a distance’, coupled with the inherent disparity in bargaining power between traders and consumers, means e-commerce is a closely regulated area.

This quick guide, written by our lawyers, walks you through the various legal requirements that apply to the sale of goods, services, and digital content online to consumers.

When do the rules apply?

The various legal requirement stipulated under this guide will apply whereby a trader or a business sells goods, services, or digital content to a consumer either over the internet, in-store, off-premises, or non-online contracts at a distance. The products must be sold to a ‘consumer’ which generally means that the consumer is not purchasing for their own business or trade. The rules may differ depending on the way the contract is formed and the type of products being sold.

Mandatory information requirements

There are mandatory duties on businesses that sell online to consumers requiring them to disclose certain information before consumers purchase products, as well as shortly after an order but before the supply of the products to the consumer. This information generally relates to the core characteristics of the product in question, such as the price and features, but also extends to matters such as additional charges. This so called ‘pre-contractual information’ is a statutory right which all consumers enjoy and a failure to provide the same may result in the extension of cancellation periods and/or the shifting of liability for contractual charges back to the trader.

Consumer contractual rights and remedies

Consumers enjoy certain contractual rights enshrined under statute. Most of these rights appear under the Consumer Rights Act 2015 (CRA). For example, the CRA obliges traders to provide services with reasonable care and skill whilst digital content must not damage a user’s device. Breach of these terms entitles consumers to enforce certain statutory remedies, such as the right to reject, right to a refund, and the right to repair or replacement. More significantly, for the first six months after purchase, the law automatically presumes that fault lies with the trader where a consumer uses their rights under the CRA. Though it is unlikely individual consumers will issue court claims against traders under the CRA, serious or repetitive breaches of the CRA may lead to Trading Standards enforcement.

Unfair terms

The CRA also regulates unfair contractual terms against consumers. These are terms that cause a significant imbalance between the contractual rights and duties of the trader and consumer to the detriment of the latter. There is also a list of 18 different types of clauses under the CRA that are automatically presumed to be unfair.

The unfair term rules generally do not apply where the term in question relates either to the specification of the product being sold or the price payable. This is because the law does not want to interfere with the ‘bargain’ struck between the trader and the consumer.

As mentioned, the use of unfair terms in a serious or repetitive way may lead to regulatory intervention.

Cancellation rights

Under certain circumstances, consumers are entitled to a 14-day ‘cooling off’ period under which they can cancel their order at no additional charge and for no particular reason. Certain information must be given to consumers before they enter into any contract explaining their right to cancel.

The key consequence of non-compliance with the right to cancellation could entitle a consumer to cancel their contract and return their products for up to over 12 months after purchase. Other consequences could be the inability to charge consumers after they cancel the services or digital content during the 14-day period, even where all of the value of the services and/or digital content is reaped during that period.

Subscription contracts

There are new rules coming into force for subscription contracts in 2027, popularly pushed forward by Labour Prime Minister Andy Burnham. These include (i) pre-contractual information requirements unique to subscription contracts (ii) a duty to send auto-renewal reminders to consumers (iii) successive or rolling 14-day cancellation periods to allow consumers to escape ‘subscription traps’.

As the new rules on subscription contracts will be regulated by the DMCCA, it is expected that heavier-handed regulatory enforcement will apply to businesses that do not follow the rules.

Omnichannel selling

The relevant requirements stipulated under this guide may differ where the customer journey is a mixture of online / distance selling and in-store selling. For example, an omnichannel brand that sells both online and has physical outlets. In such cases, however, generally, it is sufficient that the trader fulfils its legal obligations which ordinarily arise out of its online selling so that this simultaneously fulfils the legal obligations arising out of its in-store selling.  

In relation to off-premises trading – that is, namely, whereby the consumer enters into a contract usually on their ‘doorstep’ in the presence of the trader – it may not be enough to simply follow the rules for online / distance selling to satisfy the rules arising from off-premises selling. This is due to the nature of off-premises selling insofar that there is an inherent lack of information and context available to the consumer and so the rules are generally more stringent here. This may be significant for home contracting businesses or other ‘call-out’ services that conclude sales both over a website and in-person.

Consequences of non-compliance

The first consequence is that, since many of the duties mentioned in this guide are statutory, consumers themselves are able to hold traders to account where things go wrong. This may escalate to direct court action from the consumers, though this is unlikely. The more likely escalation is a referral to regulatory bodies such as the Competition and Markets Authority and Trading Standards. It must also be acknowledged that a breach of the laws stipulated in this guide may also constitute a breach of concomitant consumer protection laws, such as the DMCCA, thus widening the scope for regulatory action. There are also significant reputational risks, including the fact that regulators regularly publish their investigations into breaches of consumer law (often having a dedicated page on their website).

Exclusions and exemptions

There are certain exemptions that, if apply, may exclude traders from complying with certain requirements under the CRA and consumer cancellation rights. This depends on either the type of goods sold or the way they are sold to consumers. For example, selling products for free may be exempt from the consumer rights and remedies stipulated under the CRA.

What can we support on?

At Click Digital Law, we can support on all aspects of consumer law compliance in relation to e-commerce and omnichannel selling, regardless of how complicated or multi-faceted your consumer sales operations are. We can also support on other areas of consumer law compliance closely connected to e-commerce law, such as advertising law and data protection.

About the author

This guide was written in-house by our qualified lawyers whom you can contact here for further information and support on your business activities.