I’ve just finished working on a new template terms and conditions of use document for marketplace-type websites. This process has not been as straightforward as it should have been. Both the Ecommerce Regulations and the Distance Selling Regulations are poor fit for this kind of website, because of the range of different contractual relationships that this kind of website can give rise to.
When considering this kind of site, we need to distinguish between four different types of actor: the website operator, buyers, sellers and casual website users. The website operator has distinct legal relationships with buyers, sellers and other users. In addition, each time a sale occurs, a buyer will contract with a seller. Usually, the website operator will not be a party to contracts of sale entered into via the website by buyers and sellers.
Clearly, the Distance Selling Regulations will apply to sales by a seller acting in the course of a business to buyer who is a consumer. Website operators may want to assist sellers in complying with the Distance Selling Regulations in this respect, perhaps by supplying terms and conditions of sale that the seller can use. However, operators will want to avoid any responsibility for sellers’ legal compliance, and may therefore want to refrain from offering this kind of help, notwithstanding that that may lead to a lower level of legal compliance.
What is uncertain is whether the Distance Selling Regulations will apply to the operator-seller relationship in the situation where the seller is not acting in the course of a business. Can a seller be a consumer? The common sense definitions of these words would suggest not, but the legal definition of “consumer” has proven flexible in the past. A cautious website operator may want to either prohibit consumers from becoming sellers, in order to avoid this problem, or alternatively ensure that all the contract provisions that will apply between the operator and sellers are consumer law-compliant.
Another issue concerns the application of the Distance Selling Regulations to the operator-buyer relationship, and the point at which they might apply. The definition of “distance contract” in the regulations suggests that they apply from the point of registration in respect of the contract with the operator (as well as at the point of sale in relation to the contract with the seller) but many of the provisions in the Regulations (notably those concerned with the “cooling off” period specified by the Regulations) only make sense in respect of contracts where the consumer is paying money to the supplier.
Turning to the Ecommerce Regulations, it is clear that the provision of the website services by the website operator to both sellers and buyers in relation to sales made via the website will be “Information Society Services” within the meaning of the Ecommerce Regulations. Again, what is less clear is at what point the procedural obligations under the Ecommerce Regulations become operable – at the point of registration, at the point of purchase of a product listing (where relevant), at the point of sale, or at multiple points? Another question is this: can a seller be considered to be a supplier of “Information Society Services” within the meaning of the Regulations?
So as to avoid clogging up the template with repetitive procedural requirements, I made a number of assumptions in the drafting of the template: (i) that the Distance Selling Regulations will not apply to the operator-buyer relationship (because the buyer is not paying the operator except to the extent that the operator is acting as a payment processor on behalf of the seller); (ii) that sellers will never be treated as consumers (arguably, selling is the very antithesis of consuming); (iii) that sellers will not be considered to be suppliers of “Information Society Services” (because it is the operator providing those services); and (iv) that the operator’s obligations vis-à-vis both the seller and the buyer under the Ecommerce Regulations apply at the point of registration. Of course, this approach may not the right approach for any given website.