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E-commerce legal considerations

IP, Media & IT

The new trading system usually called "e-commerce" or "e-business" is becoming more and more popular from the improvement and installation of new technologies, starting to reach levels of the traditional trade.

We must point out that any commercial relationship between a company, whatever its size is or its products or services commercialised, and the consumer that acquires or contracts them on-line, must be interpreted as a non distance contract between the company and the consumer, therefore, the regulations that govern the traditional trade with the consumers will be fully applicable unless some exceptions.

The "e-contract" will therefore be subjected, to several applicable rules that govern different areas of the trading activity. We briefly expose their principal characteristics:

I.- Contractual terms

The relevant Spanish Law will be applicable when the consumer had accepted in Spain the contractual terms, although the contractual offer was made abroad.

All general terms of the contract shall always be drafted in plain and intelligible language, as well as known by the consumer at least three days prior to the conclusion of the contract, being the consumer subsequently provided by the whole document. The consumer must receive written confirmation relating to the contract either in the consumer's language or in the one used in the offer.

Unless specific exceptions, the consumer has a period of at least seven working days, according to its local calendar, to withdraw the contract without penalty. The supplier shall be obliged to reimburse the sums paid by the consumer.

II.- Advertising/Unfair trading

Internet, understood as any form of communication in order to promote the supply of goods, services, rights and obligations, fits with the concept of advertising. The Spanish Law bans all subliminal advertising, misleading or which may induce to error, unlawful advertising, the one that affects the persons' dignity, unfair advertising and comparative advertising in some cases. Also, we must bear in mind that the advertising of some products and services is limited.

Moreover, unfair trading acts are prohibited, such as the trade that may create confusion in the market, misleading, denigrating, trade that imitates in some cases, and when it takes unfair advantage of others' reputation, the one that breaches or discloses secret information, either denigrated or non objective comparative behaviour, selling to lose, and any other practice or conduct useful in order to promote in the market the own goods and services or those of a third person.

III.- Intellectual property

All images, drawings, texts, documents, software, computer programs, data bases, distinguishing marks, buttons, web pages' designs, its content, logos, trademarks, etc. are susceptible to be protected by Industrial or Intellectual Property Right, therefore its holder acquires the exclusive and sole right to use it, dispose of it, and exploit it in the market, excluding at the same time its use by a third person. It is possible that any of those rights may be breached in any moment at any place by a third person that uses them in its own web page without the holder's permission, or in the other hand, those rights may violate the sole right of a third person, and therefore their use must be ceased.

In spite of the implementation of disputes settlement, it has to be mentioned the problem connected with the assignment and ownership of the domain names of Internet that identify the company or individual's web page and where the e-contract is granted.

IV.- Product liability

Under the Spanish Act that implements the EU Directive, producers and importers are liable for damage caused by the defects of the manufactured or imported product. The death, personal injuries and the damage to any item other than the defective product itself are understood as damage.

Action must be started by the consumer within three years from the damage being suffered.

V.- Personal data protection

Among others duties, the data controller must use the personal data exclusively for the purpose for which he has obtained them, to adopt the appropriate technical and organisational safety measures, to keep them in secret, and must also inform and give notice to the Data Protection Agency and to the Data Protection General Register where necessary.

The individual is entitled to be informed about the existence of a personal data file, its purpose, the individual's right to get in, to amend, and to cancel it, and finally the identity and address of the data controller.

In the event of commercial communications, advertisement, direct selling and any other marketing activities, the individual is entitled to be informed about the data's source and by means of a writing notice he is entitled to require the data controller to cancel his personal data from its files.

VI.- Distance selling contracts

The Spanish law on "distance contracts" sets down that prior to the conclusion of any of them, the consumer shall be provided with the following information:

- The identity of the supplier.

- The main characteristics of the goods and services.

- Price and delivery costs.

- The arrangements for payment, delivery or performance.

- The period for which the offer remains valid.

A silence to an offer never must be considered as an acceptation, therefore unsolicited goods are not allowed and the consumer is not obliged to return them. In the event of a wrong delivery the consumer may be compensated up to the 10% of their value, otherwise he may definitely keep them. The supplier must execute the order within 30 days except where the parties have agreed otherwise.

VII.- Consumer protection

The offering, promotion and advertising of a product, activity or service must strictly adhere to its nature, characteristics, conditions, use or purpose.

The manufacturers or suppliers of durable goods should issue written warranties setting out, at least the following information:

- The scope of application.

- The person giving the warranty and the person receiving the warranty.

- The rights of the person receiving the warranty.

- The duration of the warranty, which up to now is six months, period of time that will be extended up to two years according to the implementation of the Directive 1999/44 during next year.

The person receiving the warranty is entitled to the repair of defects at no cost and to perceive compensation caused by a defect. If the defect cannot be satisfactorily repaired, the person receiving the warranty will be entitled to a replacement or a refund of the purchase price.

VIII.- Proper law and jurisdiction

The Rome Convention on 1980 sets forth that the applicable law to a consumer contract will not deprive the consumer of the protection afforded to him by the mandatory rules of the law of the State in which he has his habitual residence.

Concerning to the proper jurisdiction to settle out any dispute, the Spanish Law does not allow to the company and consumer to accept any other than the court of the State in which the consumer is domiciled or in which the obligation has to be performed. Notwithstanding, the Brussels Convention on 1968 sets out that the consumer may bring proceedings in the courts of the contracting State in which the offering company is domiciled.

Despite of the legal provisions in order to fix the accurate law to be applied and the proper jurisdiction to resolve the dispute on the electronic commerce, it is hard to get out of, specially when both parties have different nationalities and residences, therefore we should take an individual decision for each situation.

IX.- Electronic commerce Act

It is important to point out that an specific Law on electronic commerce that governs the electronic payment and signature, and the contractual terms has been brought into force.

Before 17th January 2002, Spain has to implement the EU Directive 2000/31 on certain legal aspects of information society services and the electronic commerce which contains the following basic statements:

- Communication to any professional body or similar institution (Company Register) about the domain names used by the service provider or company.

- The information to be provided to the consumers.

- No liability for the information stored or linked.

- Any commercial communication will be identifiable clearly as such, with the information of the natural or legal person on whose behalf the commercial communication is made, and with the choice of the natural persons to be registered when they do not wish to receive such commercial communications.

- It governs all contractual process to be followed by both parties, and also it fixes the place and moment when the contract is concluded.

- Court and Out-of-court dispute settlement.

 

The information contained herewith is merely a first approach to the subject and cannot be considered as detailed advice on the matter, therefore it is recommendable that should one require it, to seek legal advice on their particular case, prior to taking action or undertaking measures.