27 March 2006
If I say to you, "law", what does it conjure up in your mind? Complexity? Cost? Boredom? If so, you have my complete understanding and sympathy - and I speak as a lawyer who has spent many years working in retail! But it doesn't have to be that way.
By Adam Goldman
There are some areas of law which will particularly affect your business; you need to know about these, but you do not have to become an expert. A basic overview will enable staff to do their jobs better, reduce risk in the business and empower you to decide when to incur the cost of bringing in expert external advisers.
So what are some of the key areas of law which impact retailers on a regular basis? Contract, sale of goods, pricing, trade descriptions, product safety, advertising and promotions, data protection, disabled access, trade marks, copyright and design rights all come to mind.
Every time you sell something to customers, a contract will have been entered into. Key terms will be implied into those contracts by the Sale of Goods Act; they must be of satisfactory quality and fit for their purpose, for example. You may also have a customer satisfaction guarantee; how does that fit with your customers' statutory rights? Contracts with suppliers, licensees, distributors and agents will underpin many of your activities; negotiating appropriate terms and conditions, and recording them in writing is critical. Equally important is making sure that your business is not bound by a contract before it is ready.
The goods you sell must be safe, correctly priced and lawfully promoted. There are general and specific safety and labelling requirements which will apply to what you sell. Mistakes here can lead not only to liability to customers, but also to criminal prosecution. A well-documented process for testing products, auditing suppliers and recalling anything which is later found to be unsafe may be crucial in trying to establish a "due diligence" defence.
Advertising and promotions are largely governed by the Committee of Advertising Practice codes and the Control of Misleading Advertisements Regulations. The basic premise is that all advertisements must be "legal, decent, honest and truthful". Particular care must be taken when advertising to children and other vulnerable groups. Comparative advertising can be a minefield for the unwary. And care needs to be taken when constructing competitions and prize draws to avoid inadvertently creating an illegal lottery.
Data protection is an area which excites a great deal of interest ... and misunderstanding. The primary responsibility for those holding personal data about identifiable, living individuals is to notify (if required) the Information Commissioner's office. Whether or not there is a requirement for a particular business to notify, all so-called "data controllers" are obliged to process personal data in accordance with eight data protection principles.
The Disability Discrimination Act has come into force over a period of years. Since October 2004, there has been a duty on "service providers", which includes retail stores, to make reasonable adjustments to physical features of their premises to enable access for disabled customers. The extent of the duty can be difficult to decide, but there is no doubt that retailers must be proactive and anticipate the difficulties which disabled customers may experience - and then work out what alterations they should make.
The value of brands has been increasingly recognised for some time now. The best way to protect these is by registering them as trade marks. Trade marks are unique amongst intellectual property rights in that they can be renewed forever - a state-sanctioned monopoly which prevents anyone else using the same or a similar trade mark without the owner's consent!
Copyright and design rights are often in the news, most recently in connection with Prince Charles's journals. The retailer will, however, be more concerned with protecting works which have been created by its employees than matters royal. An understanding of copyright and design rights will be critical in order to assess just how close a look-alike can ... well ... look-alike!
Adam Goldman and the Retail Bulletin will be producing special one day seminars aimed at giving retailers a basic understanding of contract, sale of goods, pricing, trade descriptions, product safety, advertising and promotions, data protection, disabled access, trade marks, copyright and design rights. Adam was Head of Legal Services at Arcadia Group and has set up his own legal consultancy. Called Trade Law Matters, the new company provides basic legal training and consultancy services to businesses (particularly SMEs) - helping them to avoid potential liabilities, reduce costly external counsel and improve staff efficiency.
After 11 years as an in-house lawyer for Arcadia, Adam Goldman's extensive knowledge and commercial expertise provides a strong foundation for his new company.
Source: © The Retail Bulletin