When offering your goods and services online, you must be aware of the complicated EU laws protecting consumers (that is any natural person acting for purposes outside his trade, business or profession). Indeed, there exist developed consumer rights for those buying online within the European Union.
These five pieces of advice will help you conclude enforceable B2C contracts with the European consumers!
I. PROVIDE THE CONSUMER WITH A COPY OF THE CONTRACT
The business must provide the consumer with a copy of the signed contract or the contract’s confirmation on paper or, if the consumer agrees, on another durable medium. Where applicable, the trader should also include the proof of the consumer’s prior express consent and acknowledgement (Article 7 par. 2 of EU Directive 2011/83 on consumer rights, from now on the “Consumer Rights Directive”).
Let’s be honest, sending the paper versions of the contracts consumes time, paper and money. So, two questions arise: (i) to what extent “if the consumer agrees” may be problematic; and (ii) what in practice is that “durable medium”?
(i) Durable medium
Let’s start with the answer to the second question.
According to the Consumer Rights Directive, ‘durable medium’ means any instrument which enables the consumer or the trader to store information addressed personally to him in a way accessible for future reference for a period of time adequate for the purposes of the information and which allows the unchanged reproduction of the information stored.
In practice, it means that among durable media, beyond paper, there are USB sticks, CD-ROMs, DVDs, memory cards or the hard disks of computers as well as e-mails (Recital 23 of the Consumer Rights Directive). Of course, the only medium that is somehow useful among the ones listed above is the e-mail, which some find practical enough and some don’t. Therefore, the critical question you’re probably asking yourself is whether you can make general terms and conditions available on your website?
Well, no, and yes. No, because you cannot provide the consumer just with a link to the general terms and conditions on your website, where you can change them whenever you want. Yes, because you may create on your website the user accounts where each user can receive her or his personalised access to the terms and conditions binding at the moment of the contracts’ conclusion and all information regarding any further amendments.
Therefore, the obligation to provide the consumer with a copy of the contract on a durable medium means that you have to either:
- send the terms and conditions via e-mail; or
- create the personalised accounts where each user may consult the terms and conditions in force at the contracts’ conclusion and all the further amendment.
The above is confirmed for example by the following sources:
· Recital 57 of Directive (EU) 2015/2366 on payment services in the internal market: ‘information should always be provided on paper or on another durable medium, such as printouts by account printers, CD-ROMs, DVDs, the hard drives of personal computers on which electronic mail can be stored, and internet sites, provided that such sites are accessible for future reference, for a sufficient period of time for the purposes of accessing the information and provided that these sites allow the reproduction of the information stored there in an unaltered form. However, it should be possible for the payment service provider and the payment service user to agree in the framework contract on the manner in which subsequent information on executed payment transactions is to be given, for instance, that in internet banking, all information on the payment account be made available online’;
· CJEU sentence, Content Services, C 49/11 (referring to the relevant provision of the previous Directive on consumer rights): ‘a business practice consisting of making information accessible only via a hyperlink on a website does not meet the requirements of that provision, since that information is neither “given” by that undertaking nor “received” by the consumer, within the meaning of that provision, and a website cannot be regarded as a ‘durable medium’ within the meaning of Article 5(1)’;
· CJEU sentence, Bawag PSK Bank für Arbeit und Wirtschaft und Österreichische Postsparkasse AG, C‑375/15: ‘Articles 41(1) and 44(1) of Directive 2007/64/EC […] must be interpreted as meaning that changes to the information and conditions, provided for under Article 42 of that directive, and changes to the framework contract as well, which are transmitted by the payment service provider to the user of those services through the electronic mailbox of an online banking website, may not be considered to have been provided on a durable medium within the meaning of those provisions, unless these two conditions are met:
o that that website allows the user to store information addressed to him personally in such a way that he may access it and reproduce it unchanged for an adequate period, without any unilateral modification of its content by that service provider or by another professional being possible; and
o if the payment service user is obliged to consult that internet website in order to become aware of that information, the transmission of that information is accompanied by active behaviour on the part of the provider aimed at drawing the user’s attention to the existence and availability of that information on that website’.
(ii) “if the consumer agrees” – get the consent
I haven’t heard of or found any cases where the consumer consent for receiving a copy of the contract in another durable medium instead of in a printed version would be a problem. However, for the sake of peace of mind, it’s advisable not to ignore that provision.
Therefore, you may want to add a clause in your contract stating that the consumer agrees to receive a copy of the agreement in one of the forms mentioned above. Furthermore, it wouldn’t harm to request that consent with an additional “click”, for example, when you ask for the approval of the contract itself.
II. COMPLY WITH THE EXTENSIVE INFORMATION OBLIGATIONS
EU laws require that entrepreneurs provide consumers with a significant amount of information.
(i) Information you must provide to consumers immediately when offering your products or services and which you should later include in the contract*
*(for the full and detailed list see Article 6 of the Consumer Rights Directive)
- the main characteristics of the goods or services;
- the identity of the trader, such as his trading name;
- the geographical address at which the trader is established and the trader’s telephone number, fax number and e-mail address, where available, to enable the consumer to contact the trader quickly;
- the total price of the goods or services inclusive of taxes and all other costs, or where the nature of the goods or services is such that the price cannot reasonably be calculated in advance, the manner in which you will calculate the price;
- the arrangements for payment, delivery, performance, the time by which the trader undertakes to deliver the goods or to perform the services and, where applicable, the trader’s complaint handling policy;
- where a right of withdrawal exists, the conditions, time limit and procedures for exercising that right;
- where appropriate, the existence and the conditions of after-sale customer assistance, after-sales services and commercial guarantees;
- the duration of the contract, where applicable, or, if the contract is of indeterminate term or is to be extended automatically, the conditions for terminating the contract;
- where applicable, any relevant interoperability of digital content with hardware and software that the trader is aware of or can reasonably be expected to have been aware of.
Furthermore, suppose you are a service provider of information society services (social media websites, hosting and streaming sites etc.). In that case, you should also comply with the specific information obligations referred to in Article 5 of the E-commerce Directive (Directive 2000/31/EC).
(ii) Information you must provide when the consumer is placing the order
You should ensure that the consumer, when placing his order, explicitly acknowledges that the order implies an obligation to pay. If placing an order entails activating a button or a similar function, the button or similar function shall be labelled in an easily legible manner only with the words ‘order with obligation to pay’ or a corresponding unambiguous formulation (Article 8.2. of the Consumer Rights Directive).
You should also indicate clearly and legibly at the latest at the beginning of the ordering process whether any delivery restrictions apply and which means of payment are accepted (Article 8.3. of the Consumer Rights Directive).
If you need some help to be sure your website complies with all the information obligations, you can use these Recommendations prepared for the European Commission to get some templates (go directly to Annex on page 7).
III. REMEMBER OF THE RIGHT TO WITHDRAW
Remember there is an obligation for the businesses, subject to limited exceptions, to offer consumers a 14-day withdrawal period. That means a consumer has the right to change their mind during the withdrawal period, withdraw from the contract and receive a full refund, including also standard delivery costs.
As an entrepreneur, you must inform the consumer about the right of withdrawal. If you don’t inform the consumer of their right of withdrawal, the cancellation period extends to 12 months from the end of the initial withdrawal period. The chances are the unhappy consumer will withdraw from the contract within that period.
Among the exceptions from the “right of withdrawal” (see Article 16 of the Consumer Rights Directive for the full list) there are:
- the supply of goods made to the consumer’s specifications or clearly personalised;
- the supply of goods which are liable to deteriorate or expire rapidly;
- contracts where the consumer has specifically requested a visit from the trader for the purpose of carrying out urgent repairs or maintenance;
- the supply of sealed audio or sealed video recordings or sealed computer software which were unsealed after delivery;
- the supply of a newspaper, periodical or magazine with the exception of subscription contracts for the supply of such publications;
- the provision of accommodation other than for residential purpose, transport of goods, car rental services;
- the supply of digital content which is not supplied on a tangible medium if the performance has begun with the consumer’s prior express consent and his acknowledgement that he thereby loses his right of withdrawal (e.g. Netflix, Amazon Prime);
- the supply of goods or services for which the price depends on fluctuations in the
financial market.
IV. AVOID UNFAIR CONTRACT TERMS
Be aware all the Member States have applied the Directive 93/13/EEC on unfair terms in consumer contracts. That Directive provides for nullity of an unfair contractual term that has not been negotiated with the consumer (basically 99% of the B2C contracts). A contractual term is regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the consumer’s detriment.
The Directive 93/13/EEC includes the Annex listing the examples of unfair conditions. Accordingly, the conditions that may be considered unfair are, for example, those:
- excluding or limiting the legal liability of a seller or supplier in the event of the death of a consumer or personal injury to the latter resulting from an act or omission of that seller or supplier;
- authorising the seller or supplier to dissolve the contract on a discretionary basis where the same facility is not granted to the consumer;
- enabling the seller or supplier to terminate a contract of indeterminate duration without reasonable notice except where there are serious grounds for doing so;
- automatically extending a contract of fixed duration where the consumer does not indicate otherwise when the deadline set for the consumer to express this desire not to extend the contract is unreasonably early;
- enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason;
- excluding or hindering the consumer’s right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not covered by legal provisions, unduly restricting the evidence available to him or imposing on him a burden of proof which, according to the applicable law, should lie with another party to the contract.
V. REMEMBER OF THE MEMBER STATES PARTICULAR PROVISIONS
Don’t forget that in the EU each Member State may (and they do) establish their own specific regulations on consumer protection. And while consumer protection discipline is already quite harmonised among the EU countries, you should still be aware of some particularities. You can get an idea of the specific requirements for each country from this guide from DLA Piper.
As you see, the EU law is complicated. Therefore, this article aims to give you a general overview of the European regulations regarding consumer rights protection, and it does not substitute a professional and tailor sued legal advice. If you’re going to establish e-commerce directed to the EU consumers, always contact a lawyer