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
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.
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