Sale of goods over the internet for example on eBay

What is the law in relation to the sale of goods over the internet?

There are a number of laws which sellers of items on eBay should be aware of. This article briefly explains some of the most important of these.

The Sale of Goods Act 1979

Quality of goods

The Sale of Goods Act 1979, as amended, implies into a contract for the sale of goods certain terms relating to the quality of the goods being sold where such goods are sold in the course of a business. Where goods are sold during the course of a business they must be of “satisfactory quality”. Goods are of “satisfactory quality” if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price (if relevant) and all the other relevant circumstances. The quality of goods includes their state and condition and the following will, where appropriate, be taken into account when deciding whether the goods are of “satisfactory quality”: 

  • Fitness for all the purposes for which goods of the kind in question are commonly supplied (if a seller states that goods are fit for a particular purpose then that purpose will also be relevant);
  • Appearance and finish;
  • Freedom from minor defects;
  • Safety; and
  • Durability. 

The Sale of Goods Act 1979 applies to both new and used goods, although it will not be reasonable for a buyer of used goods to expect that used goods will be of the same quality as new goods.  

The Sale of Goods Act 1979 does not prevent a seller from selling damages goods or seconds, for example. However, in such circumstances the defects in the goods should be made clear to potential purchasers. Where a photograph of the goods is placed on eBay it may be sensible to describe the defects as well and it is not always possible for a buyer to identify defects from a photograph. A seller will not be liable for any defects where a buyer examines the goods before the contract is made and upon examining the goods the buyer discovered the defect or ought to have done so.

Description of goods

The Sale of Goods Act 1979, as amended, also implies into a contract for the sale of goods a term that the goods will correspond with any description given of them. This applies whether the goods are sold by a business or an individual.  

As most buyers of goods on eBay rely on the description of the goods given by the buyer as it is generally not practical to inspect the goods prior to a contract being made it is important that the description of the goods being sold is accurate.  

If the goods were described by the seller as being damaged, however, the seller will only be liable for any additional damage sustained since the contract was made (unless the parties have agreed otherwise) or any damage which was not contained in the description.

The Consumer Protection from Unfair Trading Regulations 2008

The Consumer Protection from Unfair Trading Regulations 2008 applies to businesses selling goods or services. It is a criminal offence for a business to falsely claim or create the impression that it is a consumer rather than a business. For this reason business sellers are advised to register with eBay as business sellers so that it is clear that they are selling in the course of a business rather than as a consumer.  

The Regulations specifically ban 31 types of commercial practices. Such practices are always unfair.  

Certain other practices will be unfair only where the practice causes a consumer to take a different decision, for example, where they would not have bought the product, would have exercised any cancellation rights they may have had or purchased a product at a much higher price as a result of the practice. The Regulations contain 4 categories of practices which will normally be unfair in such circumstances. These are as follows: 

Commercial practices which are in general unfair (the Regulations place a general duty on businesses to act honestly and fairly towards their customers);

Misleading actions (where false or untruthful information is given or presented which in anyway deceives or is likely to deceive the average consumer or if it creates confusion with the products of competitors);

Misleading omissions (for example, where a trader omits to state the price is exclusive of tax or delivery costs);

Aggressive practices (where a trader harasses coerces (whether by using physical force or not) or unduly influences a consumer).  

In 2010 an eBay seller in the UK was successfully prosecuted under these Regulations for bidding on his own item (a practice commonly referred to as “shill bidding”).

The Electronic Commerce (EC Directive) Regulations 2002

Under the Electronic Commerce (EC Directive) Regulations 2002 businesses who sell or advertise on eBay, or on any other website, are required to provide certain information to the recipients of their online services.

The Regulations also require that it be made clear in any advert that the seller is a business and that prices must be clear and indicate whether they include tax and delivery costs.

The Consumer Protection (Distance Selling) Regulations 2000

Where a business sells to a consumer on eBay it is required to provide the consumer with certain information. The Consumer Protection (Distance Selling) Regulations 2000 give consumers the right in certain circumstances to change their mind and cancel the contract. Where the required information has not been given and the consumer has the right to change his mind the “cooling off period” is extended from 7 working days to 3 months.

The Business Protection from Misleading Marketing Regulations 2008

The Business Protection from Misleading Marketing Regulations 2008 apply to businesses trading with other businesses. The Regulations prohibit advertising which misleads traders and sets out conditions under which comparative advertising (advertising which identifies a competitor’s product) is permitted.

The Consumer Protection Act 1987

Under the Consumer Protection Act 1987 where a person is killed, injured or their property is damaged by a defective product, they have the right to sue the producer, importer or own-brander of the defective product for damages. If a seller, who is not the producer, importer or own-brander, fails to identify the producer when asked to do so they will also be liable for the damage suffered.