SALE OF GOODS AND SERVICES THROUGH A WEBSITE

This article provides a brief outline of the legal background when selling goods and services through a website.

When selling through a website it is important to have terms and conditions in place. The relevant terms must be set out in writing as an online contract will be as enforceable as any other type of contract.

If you sell goods to consumers through a website, it is important to be aware of the following regulations:

The Sale of Goods Act 1979   This Act states that goods that are sold must be as described and of satisfactory quality.

If consumers discover that products do not meet these requirements they can reject them and ask for their money back providing they do so quickly. Alternatively, they can request a repair or replacement or claim compensation.

The Sale of Goods Act has been amended by the Sale and Supply of Goods to Consumers Regulations 2002.

The Consumer Protection (Distance Selling) Regulations 2000 Distance Selling Regulations give protection to consumers who shop by phone, mail order, via the Internet or digital TV. The protection includes:

  • The right to receive clear information about goods and services (including information about the arrangements for delivery of the product and information about the seller) before deciding to buy;
  • Confirmation of this information in writing;
  • A cooling off period of seven working days in which the consumer can withdraw from the contract;
  • Protection from credit card fraud.

The Unfair Terms in Consumer Contracts Regulations 1999 prevents sellers from enforcing terms in a contract which are contrary to the requirement of good faith and which causes a significant imbalance in the rights and obligations of the parties to the detriment of the consumer. Sellers must also ensure that they use clear and plain language when drafting because transparency is an important part of fairness.

These regulations provide significant protection to consumers and so must be adhered to very carefully by sellers. If a term is unfair, it will not be binding on the consumer. If an unfair term excludes or limits liability for unsatisfactory goods or poor workmanship, the consumer can sue for compensation regardless of it. If an unfair term is unenforceable, the rest of the contract may still be valid (unless it is unworkable without the unfair term).

Assessment of fairness takes into account the nature of the goods or services, all the circumstances relating to the conclusion of the contract and the effect of other terms in the contract or another dependent contract. This means that a term considered fair in one agreement is not necessarily fair in another.

Consumers should have the opportunity to read all the terms and conditions before agreeing to the contract. Therefore, you should ensure that the terms and conditions are clearly accessible on the website.

The Data Protection Act 1998 The purpose of the Act is to protect the rights of the individual about whom data is obtained, stored, processed or supplied rather than those of the people or organisations who control and use personal data. The Act applies to both computerised and paper records depending on the type of filing system.

If you wish to pass on individuals’ details to other organisations or wish to contact them about promotions in the future, you must obtain their consent to this. Provisions of this kind may be acceptable where there is a free choice to agree to them or not, for instance, via an option separate from the rest of the contract. But note that fairness is much more likely if consumers have positively to “opt in”. A chance to “opt out” in small print may be missed or misunderstood. In any case the chances of fairness will be increased if the significance of the choice is indicated and drawn to the consumer’s attention.

The Act requires that appropriate security measures will be taken against unauthorised access to, or alteration, disclosure or destruction of personal data and against accidental loss or destruction of personal data. It is important to ensure that your terms and conditions contain an appropriately worded privacy policy.

The Electronic Commerce Regulations 2002 states that when selling online, information must be given in a clear and ambiguous manner about the technical steps to complete a contract, prices must be clearly stated, details must be given about the supplier (in particular, the name and address and registered office address if this is different, e-mail address, the company’s registration number, any Trade or Professional Association memberships and the company’s VAT number) the fact that any orders must be acknowledged without undue delay and there must be available to the user of the site the ability to identify and correct any errors prior to the placing of their order.

Excluding liability

It is not advisable to exclude liability when dealing with consumers. You are never able to exclude liability for faulty goods or death and personal injury. If a consumer makes a mistake when entering details online, s/he should be given a reasonable opportunity to correct the error before they place their order. If you fail to do so, consumers will be entitled to rescind the contract.

The Difference between Templates and Bespoke Document Drafting

In today’s internet driven world many people find their legal document needs online. There are a range of options, including the fixed price fees we offer, that allow you to protect yourself and your business quickly.

One area that has risen in popularity over recent times is the templates for legal documents. These can be downloaded in seconds and paid for in an instant, leaving you with a legally binding piece of literature that should protect you as soon as it’s signed and witnessed.

Legal document templates are obviously cheaper and faster than bespoke document drafting as one template is constructed to fit all. They can be ideal for general insurances, small legal areas, such as tenancy agreements and partnerships yet as the requirement grows, they may not cover all.

The Benefits of Templates

  1. Tried and Tested Used by Many
  2. Easy to download
  3. Accessible within minutes
  4. Instant protection
  5. Customisable as long as the jargon stays in place
  6. The cheapest way to protect you and your business

It’s important to note though that templates are very general and if you are held under scrutiny, a law enforcer may find holes that you should have included to ensure the document was bespoke to your business.

Drafted Documents

Many people believe that bespoke drafted legal documents are very expensive. That they cost thousands of pounds and are only affordable by bigger businesses. In fact with our fixed priced fees drafted documents can save you a lot of expense in the future. Recently the news reported that the well-known celebrity Tommy Lee lost over £10 million pounds in a legal battle as the wording wasn’t quite right in the document.

Online Business

We recommend drafted documents for terms and conditions and privacy policies. By their nature these are lengthy as they must cover you for all eventualities. It’s sad but true that a disgruntled user will exploit the T and C’s, they will look for loopholes and they will have no hesitation in starting a lawsuit if they think you’ve missed something. Templates will cover the general use of your site yet they won’t be specific to your stock, services, delivery criteria and so on.

Also online people worry about their privacy being exploited. This is why a good privacy policy needs to be in place. A template will cover the generalisations such as the use of cookies but you may need it adapting to your own case. For example, you may send out newsletters via Mailchimp but the privacy policy via the template states you will not disclose email addresses to third parties. Although you’ve only given the addresses to your own Mailchimp account, a disgruntled customer could sue you for sharing information when they were led to believe you wouldn’t.

Quite simply they may take a little longer and they may be more expensive but you can’t get better protection than a drafted document.

Could Bespoke Document Drafting Pay for Itself?

Legal document templates are on the rise with people downloading these in an instant online. For as little as a few pounds you can have the protection you or your business needs within seconds. With these advantages is there still a place for bespoke document drafting? Shouldn’t everyone simply use templates and just hope for the best?

Unfortunately, although templates cover generalisations, they may be useful if you’ve less than five employees or they could be helpful for a short hold tenancy agreement, if you want to be bulletproof they’re unlikely to give you the full protection you crave.

You can of course adapt a template to suit your own needs but this is unadvisable without the help of a solicitor as if you make a mistake you risk making the whole document null and void. Hiring a solicitor to adapt a template is quite insulting. It’s embarrassing for you and in the end you will have paid the same amount as if you’d drafted a document from the start.

The Loopy Loopholes

In business drafted documents are essential. It’s a sad but true fact that the USA suing culture has hit Britain. Ten years ago we wouldn’t have dreamed of suing a box over a simple fall but today we all know that “where there’s blame there’s a claim”. This means businesses and individuals must be stringent with legally binding documents as the lawyers that promise the “no win no fee” service have an incredible knack for sniffing out loopholes you won’t even have noticed yourself.

Case Example: Let’s say you sell ice cream. You have a health and safety policy template that covers you for accidental spills. Now an employee slips on ice cream and you face a lawsuit. You may have detailed that any injury caused by accidental spills is the responsibility of the employee (as they should follow legislation of mopping, drying and placing a sign to warn others) but your no win no fee lawyer sees a loophole. Ice cream in its solid form can’t spill. Therefore your template doesn’t apply to trips and falls from the product you sell.

Many have lost thousands if not millions of pounds trying to save money with templates and in some cases they are enough but if you’re at risk of being sued, such as for health and safety, for privacy policies or terms and conditions, you need to ensure your documents are watertight.

The Lengthy T and C’s

Pop over to any well-known brand and have a flick through their terms and conditions. You’ll see how lengthy they are. They not only protect against big lawsuits they protect against the everyday almost absolving a company of all responsibility.

Claims such as “we will not be held responsible for…” “We reserve the right to…” “Our refund policy clearly states that…” These statements although innocent looking when you scan through the T and Cs and tick the box to say you agree stop the company been taken to court instantly.

With a drafted document you’ll be able to explore every angle to use the knowledge of a solicitor and tap into his expertise. Your solicitor will present you with worst case scenarios you hadn’t thought of but were thankful he or she brought them up.

In any area of law where you need to be protected it’s worth calculating how much you could lose should your legal document be challenged and then fail to stand up in court. Then see if the investment in bespoke document drafting is worth it.

Fixed Fee Bespoke Document Drafting by The Legal Stop – Customer Testimonial

The Legal Stop is a straightforward online business using information technology for the public good. We aim to make the law and provision of legal services more accessible and transparent to people and businesses alike.

For a one-off affordable and transparent fixed fee we draft a contract specifically tailored to meet your legal and business requirements.

For more info please visit: www.thelegalstop.co.uk

New Fixed Fee Legal Services

The Legal Stop is a straightforward online business using information technology for the public good. We aim to make the law and provision of legal services more affordable and transparent to people and businesses alike.

We provide fixed fee legal services and legal and business document templates for all types and sizes of businesses. Our services include:
• Legal and Business Document Templates
• Request a Template Service
• Fixed Fee Legal Advice
• Fixed Fee Bespoke Document Drafting
• Free Legal Documents and Information

For more information visit: www.thelegalstop.co.uk

 

Share of Joint Property Passing by Survivorship

The Legal Stop | Fixed Fee Legal Services

There is no obligation to accept an inheritance either under the terms of a Will, an intestacy or by right of survivorship. When an inheritance is not wanted a Deed of Variation can be used to redirect the inheritance to another beneficiary. Thus, a beneficiary who is entitled to part of a deceased person’s estate under a Will, intestacy or by right of survivorship can use a Deed of Variation to redirect the inheritance to another beneficiary of their choice.

Under the doctrine of survivorship where property is owned by two persons as joint tenants if one owner dies then their interest in the property passes to the survivor. Sometimes the surviving joint tenant may not want the property; in these circumstances the surviving joint can use a Deed of Variation to redirect the inheritance.

There are many reasons why beneficiaries may wish to vary or redirect assets held in a deceased person’s estate, one of the main reasons is to save Inheritance Tax.

When an original beneficiary uses a Deed of Variation in order to make some sort of gift and to redirect all or part of an inheritance, the gift, for Tax purposes, will be treated as having been made by the deceased person and not by the original beneficiary.

In certain situations a Deed of Variation may be used to avoid paying Inheritance Tax, provided that it is executed within two years of death.

If the Deed of Variation is executed within two years of death and contains a statement that it is intended that section 62(6) of the Taxation of Chargeable Gains Tax Act 1992 should apply, in most cases the transfer will not constitute a disposal for capital gains tax purposes. It takes effect from the date of death and works as if the distribution of the deceased’s estate had incorporated the variation.

A Deed of Variation is not retrospective for Income Tax purposes. Any income which is payable to the original beneficiary after the death of the deceased, but before execution of the deed of variation, is taxable as the income of that beneficiary.

A Deed of Variation – Share of Joint Property Passing by Survivorship shall be used where the person receiving the inheritance owned property jointly with the deceased, acquired the deceased’s interest in the property by the right of survivorship and wishes to give that interest to some other person.

 

The Legal Stop is a straightforward online business using information technology for the public good. We aim to make the provision of legal services accessible and transparent for people and businesses alike.

The Legal Stop provides affordable and transparent diverse online legal services on a fixed fee basis.  Our services include: Fixed Fee Legal Advice from UK Solicitors and Barristers, Fixed Fee Document Drafting and Legal and Business Document Templates.

Please visit us at www.thelegalstop.co.uk

Distribution Agreements

A Distribution Agreement is a legal contract between a Supplier (generally a manufacturer) that supplies goods and/or services to another party, the Distributor, for resale in a specified territory. Basically, the Supplier wishes to have its products distributed and the Distributor’s role is to develop the largest possible market for a product through distribution, sales and marketing activities.

A well written Distribution Agreement regulates the relationship between the parties; it should be comprehensive and balanced in that it sets out the rights and obligations of the parties and protects the interests of both parties.

Distribution Agreements may be exclusive or non-exclusive. In an exclusive distribution agreement the distributor will be the only person permitted to distribute the products/services in the territory. Conversely, in a non-exclusive distribution agreement the distributor might be one of several distributors in the same territory.

Distribution Agreements must be carefully drafted to take into account what the parties are trying to achieve and the implications of competition law and other regulations that can have severe penalties.

Key elements to be considered include:

  • The territory covered
  • Non-exclusivity or exclusivity
  • Non-compete obligations
  • Responsibilities of the parties in terms of promoting, selling and distributing the products/services
  • Intellectual property
  • Terms and conditions of sale
  • Confidential information
  • Circumstances in which the agreement may be terminated
  • Consequences of termination

Please note that you can give a distributor exclusive rights to a particular territory, however, under competition law you may not be able to give the distributor exclusive rights and at the same time prevent the distributor from selling competing products.

You can stop a distributor selling competing products provided you do not have ‘selective distribution’ or have a market share of over 30%. However, the restriction on selling competing products must not be indefinite or last more than five years.

You have ‘selective distribution’ if you deliberately limit the number of distributors, or require distributors to meet particular qualifying criteria. ‘Selective distribution’ has implications under competition law. In particular, it is illegal to prevent selective distributors from selling competing products.

You can stop a distributor selling outside the territory if your share of the market on which it supplies the relevant goods or services does not exceed 30%.  If you have a market share of over 30% then you cannot.

Furthermore, a distribution agreement cannot restrict passive sales i.e. if a customer approaches the distributor then the distributor should be free to sell to that customer even if it is outside the territory.

Finally, please note that you cannot control the prices a distributor charges their customers for the products/services as it would be a breach of competition law.

The Legal Stop provides several services including fixed fee legal document drafting where you will be able to obtain a distribution agreement specifically tailored to meet your needs. In addition we also offer downloadable distribution agreement templates, our templates are:

Our distribution agreement templates are suitable for use in the UK or abroad where the parties to the agreement are individuals or businesses, and can be used for sale and promotion of goods and/or services. They are flexible and can be adapted to suit specific needs of the parties.

The templates are intended to satisfy the requirements of the EU and UK competition law rules affecting “vertical restraints”. They are drafted on the assumption that the supplier’s share of the market on which it supplies the relevant goods or services does not exceed 30%; the purchaser’s share of the market on which it buys those goods or services does not exceed 30%, and the distributor does not compete with the supplier in the production or manufacture of the products covered by the distribution agreement.

The Legal Stop is a straightforward online business using information technology for the public good. We aim to make the provision of legal services accessible and transparent for people and businesses alike.

We provide affordable and transparent diverse online legal services on a fixed fee basis. Our services include:

 

AN OVERVIEW OF COMPROMISE AGREEMENTS

A compromise agreement is a formal, legally binding agreement made between an employer and employee (or ex-employee) in which the employee agrees not to pursue particular claims that they might have in relation to their employment or its termination, in return for a financial settlement. Thus, the primary function of a compromise agreement is to stop an employee from making any statutory or contractual claim in connection with their employment.

Compromise agreements are often used in situations where employer and employee want to part company without resorting to redundancy, firing or resigning. They can also be used as a way of settling serious employee grievances, such as claims of constructive dismissal or unlawful discrimination. Generally, compromise agreements are used by employers in order to remove employees from employment quickly and easily, avoiding the possible adverse publicity and uncertain outcome of an Employment Tribunal or court case.

This article considers the overall legal requirements of compromise agreements, but legal advice should always be sought when drafting such an agreement.

Compromise agreements are complex legal documents and they must be specifically drafted according to the facts and circumstances of each particular case. The Legal Stop offers a fixed fee compromise agreement drafting service in addition to our compromise agreement templates. For further details please contact us using our request form.

Legal Formalities

In order for a compromise agreement to be legally binding, the following conditions must be satisfied:

  • The agreement must be in writing.
  •  It must relate to the ‘particular proceedings’.
  • The employee must have received independent legal advice from a qualified adviser as to the terms and effect of the agreement.
  • There must be in force, when the adviser gives the legal advice, a contract of insurance or professional indemnity insurance covering the risk of a claim by the employee in respect of loss arising as a result of the advice.
  • The agreement must identify the relevant adviser.
  • The agreement must state that the conditions regulating compromise agreements are satisfied.

Employee’s Complaints

A compromise agreement can be used to settle one or more employee complaints. It must clearly state each of the specific complaints being settled and refer to the relevant statutory provisions because, as identified above, the compromise agreement must relate to the ‘particular proceedings’. Please note that a ‘blanket agreement’ simply signing away all of an employee’s employment rights, or one which lists every form of employment right known to the law, will not be a valid compromise agreement.

Contractual and Statutory Claims

Compromise Agreements are an exception to the general principle set out in all employment legislation that an individual cannot contract out of their statutory employment rights. Thus, a compromise agreement is necessary to obtain a valid waiver of an employee’s statutory claims. Please note that there is no need for a compromise agreement in order to settle only contractual claims. This is because an agreement to refrain from instituting proceedings in a contract claim is binding without the need for any special requirements to be satisfied. A simple waiver and release of claims will be effective. On the other hand, with statutory claims, any agreement by an employee to waive their statutory rights that is not in the form of a compromise agreement will be invalid and unenforceable. This means that the employee would still be eligible to lodge a claim in the Employment Tribunal, even though they might have already accepted a sum of money from the employer in apparent ‘full and final settlement’.

‘Without prejudice’

Open discussions with employees in relation to compromise agreements are very risky. This is because such conduct, if not protected by the veil of without prejudice privilege, is likely to be enough to constitute a fundamental breach of the implied term of mutual trust and confidence, enabling the employee to resign and claim constructive dismissal. Thus, never invite an employee to resign in return for an exit package on an open basis. The employee might resign anyway and then issue a constructive dismissal claim.

For the ‘without prejudice’ rule to apply, the employee must have genuinely consented to the meeting being held on a ‘without prejudice’ basis, there must be a pre-existing dispute between the parties and the discussion must be a genuine attempt to settle the dispute.

Compromise Agreement Clauses

Common clauses found in a compromise agreement include:

  • An agreement by both parties to keep the details of the settlement confidential and not to make detrimental statements about one another.
  • A requirement for the employee to return the employer’s property.
  • The provision of an agreed form reference for the employee.
  • A requirement for the employee to resign as a director or as company secretary.
  • A requirement for the employee to transfer their shares in the company.
  • An agreement by the employer to contribute towards the employee’s legal costs.
  • A tax indemnity from the employee.
  • Post-termination restrictive covenants (if these are new, there should be a separate monetary payment, called ‘consideration’, given to the employee for agreeing to them).
  • Confirmation that the employee has not knowingly committed any breach of their employment contract or breach of duty owed to the employer.

Generally accrued pension rights cannot be waived under a Compromise Agreement (as the trustees of the pension fund are not party to the agreement).

If the terms of the Compromise Agreement are breached by the employer, the employee could pursue a claim for breach of contract.

Taxation

Employers often wrongly believe that all payments made on the termination of employment are subject to a tax exemption of £30,000. Not all sums payable under a compromise agreement are tax-free. In determining what tax is payable in respect of termination payments, the key is to identify each element of the termination package and then consider the tax provisions applicable to the individual elements.

Outstanding wages, bonuses, commission and holiday pay are fully taxable, being payments made under the employee’s contract of employment. Ex gratia (non-contractual) sums paid as compensation for loss of employment under the terms of the compromise agreement are taxable, but subject to the £30,000 tax-free exemption.

Where an employee receives a contractual payment in lieu of notice, the payment is chargeable to tax as earnings from employment. However, where there is no contractual entitlement to a payment in lieu of notice, a non-contractual payment will be regarded as compensation for loss of employment, making it subject to the £30,000 tax-free exemption.

The Legal Stop is a straightforward online business using information technology for the public good. We aim to make the provision of legal services accessible and transparent for people and businesses alike.

We provide affordable and transparent diverse online legal services on a fixed fee basis.  Our services include: Fixed Fee Legal Advice from UK Solicitors and Barristers, Fixed Fee Document Drafting and Legal and Business Document Templates.

Our Compromise Agreement Templates are: