KNOWLEDGE BASE Ecommerce - Online Shopping In Singapore


Ecommerce and Online Shopping in Singapore

 

In recent years there has been a huge increase in the number of e-commerce businesses worldwide. Not surprisingly, there has been a corresponding increase in e-commerce regulation worldwide. Not only can the laws and regulations be complex, but they can vary greatly from country to country. You should become familiar with and gain at least a basic understanding of the laws and regulations that apply to your business and because of the rate of technological advancement throughout the world, it is particularly important for you to remember that laws are fluid and subject to change. SIngapore has developed a legal and regulatory environment to adapt to the new digital age.

 

What laws and regulations apply?

Singapore has an e-commerce framework that includes regulation of internet content, advertising, electronic contract formation, and consumer protection. The Internet Code of Practice places restrictions on the content that is published on the internet. Singapore has a comprehensive advertising regulation regime, which includes the Singapore Code of Advertising Practice, the Spam Control Act, and the Computer Misuse and Cybersecurity Act. The Electronic Transactions Act 2010 regulates electronic contract formation. Singapore adheres to a high standard of consumer protection through the Unfair Contract Terms Act, the Consumer Protection (Fair Trading) Act, Consumer Protection (Fair Trading) (Opt-Out Practices) Regulations, and the Misrepresentation Act. Because of the depth of the advertising regulations, you can find an advertising section here.

 

Internet Code of Practice

The Internet Code of Practice, issued by the Media Development Authority of Singapore, requires that your best effort be made to ensure that prohibited material is not broadcast via the Internet to users in Singapore. Essentially, the Internet Code of Practice is an internet content regulator that would apply to internet practices, including but not limited to, website content, advertising, and marketing. Prohibited material means anything objectionable on the grounds of public interest, public morality, public order, public security, national harmony, or is otherwise prohibited under applicable Singapore laws. The Internet Code of Practice lists factors to be considered when determining whether material is prohibited. When in doubt, the Authority can be contacted to issue its decision.

 

Electronic Contract Regulatory Framework

The purpose of the Electronic Transactions Act (ETA) was to create a predictable legal environment for e-commerce by clearly laying out the rights and obligations of transacting parties. The original ETA was enacted in July 1998. The ETA was updated and reenacted in 2010 to align with the United Nations Convention on the Use of Electronic Communications in International Contracts. Some of the most important provisions include the regulation of:

  • the legal recognition of electronic signatures;

  • the retention of electronic records;

  • “original” documents;

  • the time and place of dispatch and receipt of contracts;

  • invitations to make offers;

  • contracts formed through automated message systems;

  • errors in electronic communications; and

  • secured electronic signatures and records.

 

Consumer Protection

 

Consumer Protection (Fair Trading) Act 2009

The Consumer Protection (Fair Trading) Act 2009 (CPFTA) sets out a list of specific unfair trade practices and allows consumers to seek civil remedies in court.

 

Unfair Practices

Part II of the CPFTA, Unfair Practices, is applicable when the supplier or consumer is a resident of Singapore or when the offer or acceptance relating to the consumer transaction is made in or is sent from Singapore.

Part II defines “unfair practice” as when, in relation to a consumer transaction, a supplier:

  1. does or says something, or omits to do or say something and as a result, the consumer might reasonably be deceived or misled;

  2. makes a false claim;

  3. takes advantage of a consumer when the supplier knows or reasonably ought to know that the consumer:

    1. is not in a position to protect his own interests; or

    2. is not reasonably able to understand the character, nature, language, or effect of the transaction or any matter related to the transaction.

 

In practice this means:

  • You should provide your customers with all relevant and material information so as not to mislead your customers.

  • Provide your customers with the opportunity to make an informed decision.

  • Frequently review the information you provide to your customers and the manner in which you convey that information.

 

 

Risks of noncompliance

The cap for a claim filed under the Act is S$30,000. A court could also impose the following  other remedies: order to repair or replace the goods, restitution of money or property, award for damages or loss suffered by the unfair practice, and in some cases, specific damages.

In determining whether a business or supplier engaged in unfair practices, the court will consider the reasonableness of the business’ or supplier’s actions. In ordering an appropriate remedy, the court will consider whether the consumer took reasonable steps to try to minimize  his damage or loss and whether he tried to resolve the dispute with the business or supplier before seeking a legal remedy.

 

Singapore “Lemon Law”

Part III of the CPFTA provides consumers with an avenue for legal redress in the event they purchase a defective product, also known as a lemon. A product is considered defective if it does not conform to the agreement at the time of delivery. A defective product could be:

  • a product that does not correspond with its description;

  • a product that is not of satisfactory quality; or

  • a product that is not fit for the purpose communicated to the purchaser before the purchase.

 

Remedies available to a buyer

When a consumer purchases a defective product (a lemon) he has 6 months to remedy the situation through the CPFTA lemon law provisions. The remedies available to a consumer include:

  • repair of the product within a reasonable time at the seller’s cost;

  • replacement of the product within a reasonable time at the seller’s cost;

If the seller fails to repair or replace the defective product within a reasonable time or the repair or replacement of the defective product would be impossible or disproportionate in cost, the consumer may be entitled to the following additional remedies:

  • a reduction in the amount paid for the product; or

  • a refund for the product.

 

Consumer Protection (Fair Trading) (Opt-Out Practices) Regulations 2009

The Consumer Protection (Fair Trading) (Opt-Out Practices) Regulations 2009 governs the acceptance of unsolicited goods or services, continuing supply contracts, free trial basis goods and services.

 

Unsolicited goods and services

Unless and until a consumer expressly acknowledges to you in writing, his intent to accept and pay for unsolicited goods or services, the consumer may do what he wants with said goods or services as if they were an unconditional gift. Unless a consumer provides this written acknowledgment, you has no cause of action for loss, use, misuse, possession, damage, or misappropriation with respect to the goods or services.

A consumer who pays for unsolicited goods or services may give you demand, in writing, for a refund of payment if he or she did not expressly acknowledge to you his or her intention to accept and pay for the goods or service. The consumer’s demand must be made within 12 months and you must issue a refund within 60 days of receiving the demand.

 

Risks of noncompliance

Failure to issue a refund within the allotted time (60 days) will open you up to a breach of a statutory duty claim in court of up to S$30,000. You bear the burden of proving the requirements have been complied with.

 

Continuing supply contracts

If a consumer is being supplied with goods or services on a continuing basis and there is a material change in the goods or services or in the supply of the goods or services, the goods or services shall be deemed to be unsolicited goods or services from the time of the material change, unless the consumer consented in writing to the material change. Consent is not assumed merely because the supplier gave notice to the consumer that “the supplier will supply the materially changed goods or services to the consumer unless the consumer instructs the supplier not to supply those goods or services.”

       Material change does not include:

  • a change in the price or a renewal of an existing supply, if the goods and services are not otherwise changed; or

  • a change that a reasonable person in the position of the consumer would not view as being material.

 

Free trial basis goods and services

If you supply goods or services (whether solicited or unsolicited) on a free trial basis, you must given the consumer a reminder notice at least 3 days but no more than 14 days (excluding Saturdays, Sunday, and public holidays) before the end of the free trial period. You must send the notice to the consumer’s address (or email address or telephone number) with the following information clearly and conspicuously included:

  1. the date the free trial period ends, and

  2. the address (or email address or telephone number) at which the consumer can notify you before the end of the free trial period whether he or she wishes to continue to receive the supply of goods or services.

A consumer who pays for goods or services supplied on a free trial basis may give you a demand, in writing, for a refund if:

  1. you did not give the consumer a reminder notice in accordance with this regulation, and

  2. the consumer did not, at any time after the commencement of the free trial, expressly acknowledge to you, in writing, his intention to accept and pay for the goods or service.

 

Unfair Contract Terms Act

The Unfair Contract Terms Act (UCTA) was designed primarily to protect consumers who may be prejudiced by the weaker bargaining power they have in most consumer transactions. The UCTA restricts and defines your ability to limit your negligence and contractual liability and your use of unreasonable indemnity clauses. The “Guarantee” of Consumer Goods provision prevents you from limiting your liability for defective or negligently manufactured or distributed goods.

 

Misrepresentation Act

The Misrepresentation Act provides remedies for a consumer if he enters into a contract or transaction based on misrepresented terms or information given to him by the seller. Misrepresentation is defined as a false statement, communicated from one party to another, which induces the latter to enter into a contract. Misrepresentation can be in the form of silence, but puff or exaggeration does not rise to the level of misrepresentation. If misrepresentation is established, the consumer may choose to either rescind the contract or affirm the contract. The consumer may also be able to sue for any damages or loss suffered due to the misrepresentation.

 

Singapore Code of Advertising Practice

Spam Control Act

Computer Misuse and Cybersecurity A

Internet Code of Practice

Electronic Transactions Act

United Nations Convention on the Use of Electronic Communications in International Contracts

Consumer Protection (Fair Trading) Act 2009

Consumer Protection (Fair Trading) (Opt-Out Practices) Regulations 2009

Unfair Contract Terms Act

Misrepresentation Act

Consumer Association of Singapore

KNOWLEDGE BASE Ecommerce - Online Shopping In Singapore