Selling downloaded content or software under the Consumer Contracts Regulations
About this series of articles
This article is the seventh in a series about the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, often abbreviated to CC (ICAC).
It discusses what you should do to comply with the Regulations if you sell “digital content on an intangible medium” – documents, video, audio or any other files delivered by download or e-mail.
The series explains the law, and how to apply it to your business so that you remain compliant.
Requirement to provide information about the content
All traders selling to consumers have to provide basic information about the product they are selling. Additionally, traders selling downloaded products also have the obligation to provide information about the functionality of the product.
That might mean providing information about compatibility with operating systems and other software, whether there is requirement to use other software (such as to unpack a zipped file), and other issues that might arise with region coding and DRM restrictions.
Cancellation of an order for a digital product
Under the old Distance Selling Regulations, a vacuum sealed package such as a CD or DVD could not be returned once the seal was broken. The reason of course was that a buyer could otherwise take a copy then ask for his money back. In the Consumer Contracts Regulations, there is a specific cancellation exemption for sealed audio, video and software which the consumer has unsealed, at Regulation 28(3) (b).
Of course, with downloaded products, the same problem applies – the customer could take a copy then cancel and ask for a return of his money – but there is no seal to indicate whether the customer has copied the content.
You could tell your customers that you will not accept returns, but that may not hold water when you are dealing with your local trading standards team.
So the answer to how to avoid the risk of cancellation is to structure the download process and transactional wording so as to get the consumer’s agreement to waive his cancellation and refund right.
To do that you need:
- carefully worded terms and conditions that provide the instruction to you;
- to make sure the contract is not made until after the customer has given the instruction and foregone his cancellation rights;
- to make sure the customer knows the score.
Your terms and conditions document should make sure that a contract comes into existence only after you have provided the required product information. Make clear when this happens.
You should make sure your terms do not give the required 14 days notice before the contract exists. If that happens, then in law the cancellation period starts when your 14 days period end and you give your customer 28 days unintentionally instead.
Additionally, you should obtain a request, and not merely the passive permission, of your customer, for immediate delivery, so that he may not later cancel. If you do not, he may be able to keep your product free of charge. To obtain his express request, you should include the request within your terms, and possibly, also use wording on your website at the payment point for immediate delivery.
The customer must make the request before the contract is made.
We recommend that you read about the requirements for giving information next.
Unless you are exempt from the Regulations or are already compliant, you are likely to need to update your customer contract templates. These are likely to include your terms and conditions for your website if you sell online and your offline customer contract if you sell offline.
All Net Lawman documents have been updated to comply, if required, with the Regulations. We think that it will be much easier to edit one of our templates, than make changes to your existing documents.
If you have any questions about the Consumer Contract Regulations 2013, or would like help updating your contracts to comply, please ask us. We’d be delighted to help.
Please note that the information provided on this page:
- Does not provide a complete or authoritative statement of the law;
- Does not constitute legal advice by Net Lawman;
- Does not create a contractual relationship;
- Does not form part of any other advice, whether paid or free.
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