Use of the internet has been generally free from government regulation, partly because governments and courts have been slow to address the policy and legal implications of this fast-evolving technology. However, in the e-commerce area, government regulation now exists in the form of the Internet Sales Contract Regulation (the Regulation), a regulation made under the Alberta Fair Trading Act.
The Regulation applies to agreements to purchase goods or services over the internet worth over $50.00 and includes those using an online shopping cart system. Although the Regulation is made under Alberta law, it will apply when an Alberta customer purchases goods or services from an e-commerce business (e-business) from another province or country and an out-of-province business that sells its goods or services to customers in Alberta.
An e-business must provide its online customers with information such as: its legal name and any name that it uses to carry on business (trade name); its business, mailing and email addresses; telephone and fax numbers; the delivery date of the goods or commencement date of the services, together with details of the delivery arrangements, including the name of the shipper, mode of transportation and place of delivery; its cancellation, return, exchange and refund policies, if any; and details on any other restrictions, limitations or conditions that may apply.
This information must be prominent, clear, comprehensible and easily accessible by the customer, who must be able to print and retain this information. The shopping cart process must also expressly permit the customer to accept or decline the agreement and to correct any errors immediately before entering into the agreement.
Within 15 days, the e-business must send a copy of the contract to the customer that includes all of the above information together with the customer's name and the date of the contract by e-mail, fax, mail or by any other method where the e-business can prove that the consumer has received a copy of the contract.
If an e-business fails to provide the required information and documents to the customer, the customer can cancel the contract within 7 days after receiving a copy of the contract or, if a copy of the contract was not provided to the customer, within 30 days after the date of the agreement.
Furthermore, the customer can cancel the contract if the e-business:
- fails to deliver the goods within 30 days of the stated delivery date;
- fails to begin performing the services on the stated commencement date with respect to travel, transportation or accommodation services;
- fails to begin performing the services within 30 days of the stated commencement date with respect to other services; or
- fails to deliver the goods or commence performing the services within 30 days from the agreement where there is no stated delivery or commencement date, so long as the cancellation occurs before such delivery or commencement.
A customer can cancel the contract by notifying the e-business in any way, including telephone, courier, fax and e-mail. Cancellation by the customer is treated as if the contract never existed.
When a customer cancels a contract, the e-business must refund all money paid by the customer under the contract within 15 days of cancellation. If goods have been delivered to the customer, the customer must return the goods unused and in the same condition it was delivered within 15 days from either cancellation or delivery of the goods, whichever is later. The e-business must accept return of the goods and pay for the reasonable costs of its return.
If the customer paid by credit card and the e-business fails to refund all of the money to the customer within 15 days of cancellation, the customer may request the credit card issuer to cancel or reverse the related credit card charge, including any associated interest. The credit card issuer must cancel or reverse the charge if the customer has provided his name, the credit card number, the card expiry date, the name of the e- business, the date the agreement to purchase was entered into, the amount paid, a description of the goods or services, the reason for cancellation and a statement that the customer did not receive a refund from the e-business.
E-businesses and credit card issuers who fail to refund money to customers who have properly cancelled a contract are liable to pay a fine of up to the greater of $100,000.00 or three times the profit gained and face imprisonment of up to two years.
The Regulation will require all e-businesses, whether or not they are resident in Alberta, to review their shopping cart sale processes to ensure that these processes comply with the provisions of the Regulation. Credit card issuers will also have to implement procedures to deal with cancelled transactions.