Many of our ecommerce clients often make the valid point that given the nature of the internet, a customer may make a purchase through their website from any country in the world. In this context, where we are assisting clients with their online terms and conditions, one question commonly arises.
By claiming that English law applies in the terms and conditions, can you avoid having to comply with any local laws in the countries in which the customers are based? Often this question is supported by a comment such as "Amazon's terms and conditions just apply the law of the country in which Amazon is based so that must be correct."
A case involving Amazon EU was recently taken to the European Court of Justice. Amazon EU's online terms and conditions stated that the contract with its customer would be governed by the law of Luxembourg (where Amazon EU is based). The court held that terms such as this are unfair and contrary to consumer protection laws. This is because they give the consumer the impression that only the law of the country in which the seller is based applies to the contract. The court held that the terms and conditions should make it clear to the consumer that, regardless of the governing law stated in the terms, they will still have the protection of local mandatory laws.
This case serves as a reminder to online retailers that mandatory local laws cannot be avoided when selling to customers who are based in another country. When drafting your online terms and conditions, we would strongly recommend that local law advice is obtained so that you know which laws apply to you, regardless of what you have said in your terms. You also need to ensure that your terms and conditions make it clear that, despite the governing law chosen, the customer will still have the protection of their local mandatory laws.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
