Online retailers rapped over unfair contracts

A dozen online retailers - all selling computer equipment and software - have been forced to remove unfair clauses from their contracts with customers

Computer supplier Micro Anvika is among a dozen online retailers to have stopped including what the Office of Fair Trading called "unfair terms" in the contracts they formed with their customers.

All 12 companies are understood to have ceased to use unfair terms by either withdrawing the contract or revising the terms in their contracts: Micro Anvika said it would abide by distance-selling laws following a complaint by their local Trading Standards Department. It has also agreed to a number of other undertakings, among which is an agreement that it will no longer exclude liability for a number of reasons.

Contracts previously used by Micro Anvika had given consumers a very short time in which to inspect goods and notify faults, which effectively excluded it from liability, said the OFT. Contracts also excluded the company from liability for mistakes or inaccuracies on its Web site, and for defective software. In addition to removing these clauses, the company also dropped terms allowing it to vary the price and specification of goods, removed what the OFT said was confusing information about delivery charges, and ended restrictive consumer cancellation rights.

The changes were made under obligations contained in the Unfair Terms in Consumer Contracts Regulations, which apply to standard contract terms used with consumers in contracts made after 1 July, 1995. "The Regulations say that a consumer is not bound by a standard term in a contract with a seller or supplier if that term is unfair," said law firm Masons. "They also give the OFT and others powers to stop the use of unfair standard terms, if necessary by obtaining a court injunction. Ultimately, only a court can decide whether a term is unfair."

Masons went on to point out that the Distance Selling Regulations give consumers rights when shopping online or by mail order. "Under the Regulations, consumers shopping this way have the right to clear information, a cancellation period of seven working days and protection against fraudulent use of a credit card."

John Vickers, OFT chairman, said: "Terms in contracts must be both clear and fair, and consumers must not be denied the extra rights they have if they buy by mail order or on the Internet."

Eleven other companies have given undertakings and stopped using unfair terms, namely: Mesh Computers, Aire Valley Computers, Dabs Direct, First Micronics Limited, Mr P Hollis trading as Holtronix Computer Services, Lasertek Computer Systems, Mad Macs, RDC, Spot On Computers Limited, Watford Electronics and Scan Computers International. The OFT said it is also currently looking at around 10 other computer companies that may be breaching unfair contract or distance-selling laws.


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