New distance selling law for consumers and entrepreneurs

1. new law

Without a transitional period, new legal regulations for distance selling will apply from 13.06.2014. This means that both the technical processes in distance selling, especially of online shops, and the general terms and conditions must be reviewed and adapted. The old procedures and the previous formulations in the general terms and conditions may no longer be used after 12 June 2014. Otherwise, there is a risk of warnings. The new processes and the new GTC may not be used before 13 June 2014, as this may also lead to warnings. Accordingly, the changeover must take place precisely from 12 June to 13 June 2014. The new legal provisions affect all businesses that engage in distance selling.

The so-called "warning industry" will use the lack of a transitional period to issue mass warnings. Therefore, action is urgently required in any case. Since the new legal regulations are unfortunately not unambiguous in all formulations - but rather ambiguous in some cases - not all questions that arise can be resolved to final satisfaction at this time. Rather, the final regulations will only be found through case law. The following information is intended to show the currently foreseeable way forward for businesses active in distance selling. Only the safest solution is proposed. The changes concern the texts used in online trade (general terms and conditions) and the technical processes of the orders.

Overview:

  • 2. extended concept of the consumer
  • 3. preset ancillary services inadmissible in the future
  • 4. surcharges for payment methods now regulated
  • 5. service numbers with costs are not permitted for "contractual matters
  • 6 New and extended pre-contractual information obligations of the trader
  • a. Information about the date by which the trader must deliver the goods or provide the service
  • b. Information about the existence of a statutory right of liability for defects for the goods
  • c. Precise information on the existence and conditions of after-sales service, after-sales services and guarantees
  • d. Information on the duration of the contract or the conditions of termination of open-ended contracts or automatically renewing contracts
  • e. Information on the functioning of digital content, including applicable technical protection measures for such content
  • f. information on limitations to the interoperability and compatibility of digital content with hardware and software, insofar as these limitations are known or must be known by the trader
  • g. Information on delivery restrictions and accepted means of payment
  • 7. obligation to confirm a distance contract
  • 8. new right of withdrawal

Re 2: Expanded concept of consumer

Until now, the following definition of consumer applied: A consumer is any natural person who enters into a legal transaction for a purpose that can be attributed neither to his or her commercial nor to his or her independent professional activity. In future, the concept of consumer will be expanded: a consumer is any natural person who concludes a legal transaction for purposes that can predominantly be attributed neither to his or her commercial nor to his or her independent professional activity.

This means that even traders may have to be treated as consumers with all rights when placing orders. In order to avoid warnings, the general terms and conditions must be revised taking into account the new concept of consumer.

 ⇒ Changes to the general terms and conditions (GTC) required

Re 3: Preset fringe benefits inadmissible in future

Additional services subject to a surcharge, such as warranty extensions or damage insurance, etc., may no longer be preset for "deselection". According to the new law, the trader is not entitled to a fee for such extras subject to a surcharge if this ancillary service has become part of the contract through a pre-setting. Such ancillary services, which are related to the main service selected by the consumer and could therefore be of interest to the consumer, may also be advertised and offered in connection with the desired main service in the future. However, the checkbox must not be pre-activated under any circumstances. The consumer must actively select the additional service.

⇒ Technical change to the ordering system

Re 4: Surcharges for payment methods

In future, surcharges for cost-intensive payment methods (credit card, cash on delivery, etc.) will only be permitted if at least one reasonable and common payment method is offered without a surcharge. (e.g. SEPA bank transfer). Only the actual costs may be charged for the surcharges. Higher surcharges are inadmissible and anti-competitive. In case of dispute, the entrepreneur has the burden of proof. The GTC and the technical procedure in the shop system must be adapted accordingly.

⇒ Changes to the general terms and conditions (GTC) required

⇒ Technical change to the ordering system

Re 5: Chargeable service numbers in "contractual matters" inadmissible

For questions or declarations (also in the case of revocation!), which concern the concluded contract between consumer and entrepreneur, a chargeable value-added service number may no longer be held if a call on it costs more than the mere use of the telecommunications service. This means that only numbers whose use costs no more than the usual tariff for fixed-network or mobile calls within Germany will be permitted. Chargeable value-added service numbers remain permissible only for general questions that do not relate to a contract concluded with the trader, such as questions about the product range or the functioning of individual products.

Technically, it must be ensured that callers with contractual questions are to be provided free of charge in any case. Although this is technically possible, it is costly and personnel-intensive. In any case, it is not permissible to state a value-added service number as a call number in the cancellation policy. In future, a declaration of withdrawal can also be made by telephone and is always related to a concluded contract between consumer and trader.

⇒ Changes to the general terms and conditions (GTC) required

⇒ Technical change to the ordering system

Re 6: New and extended pre-contractual information duties of the trader

In addition to the previous information obligations (e.g. imprint, conclusion of contract, right of withdrawal), further information must now be provided. In the event of a violation, legal disadvantages and warnings are to be expected.

Ad 6 a) Information on the date by which the trader must deliver the goods or provide the service

The trader must inform about the date by which he will deliver the goods or provide the service. The legal wording is unclear! It is currently unclear whether a specific delivery date or a maximum delivery period must be stated. It is predominantly argued that a delivery period should be sufficient. As a rule, a precise delivery date cannot be stated before the order is placed. We expressly point out that this regulation must first be interpreted by case law. This cannot be predicted at present. At present, the interpretation of a delivery period seems more likely than that of a specific delivery date.

Significant problems also arise when specifying delivery dates:

aa) The delivery time information in the web shop must necessarily correspond with the information on the delivery period. It would be inadmissible for the offers to state "immediately available" or "delivery time approx. 2 - 3 working days" if a delivery period of up to seven days is to be reserved in the delivery period.

bb) Exceeding the stated delivery period means default on the part of the trader with all legal consequences.

cc) Delivery times must be calculated and communicated in concrete terms, taking into account the method of payment (e.g. prepayment, invoice, credit card, etc.) and Sundays and public holidays. The calculation of the maximum delivery date must be easily possible for the consumer only on the basis of factors known to him. For example, the start of the period must not read: " The delivery period begins with the receipt of payment on our account." The consumer does not know this date.

Formulation examples:

Attention: These formulations must be individually adapted to the goods, shop, company and delivery types!

"Delivery shall take place at the latest within 5 working days (Monday to Friday, public holidays excepted) after the payment order has been issued to the remitting bank (in the case of advance payment) or after conclusion of the contract (in the case of cash on delivery or purchase on account)" or

"Delivery shall be made within 5 days. The delivery period shall commence on the day after the payment order is issued to the remitting bank in the case of payment in advance or on the day after conclusion of the contract in the case of cash on delivery or purchase on account and shall end on the following fifth day. If the last day of the period falls on a Saturday, Sunday or a public holiday recognised by the state at the place of delivery, the next working day shall take the place of such a day."

⇒ Changes to the general terms and conditions (GTC) required

⇒ Technical change to the ordering system

Re 6. b) Information on the existence of a statutory right of liability for defects for the goods

In future, the trader must inform about the existence of a statutory right of liability for defects for the goods before the conclusion of the contract.

Examples:

aa) without amendments: "Information on liability for defects: The statutory provisions on liability for defects shall apply".

bb) with amendments by GTC: "Information on liability for defects: Liability for defects is governed by clause XXX of the GTC (link)".

⇒ Changes to the general terms and conditions (GTC) required

⇒ Technical change to the ordering system

Examples of placement:

a) The reference to the liability for defects with each article (str.) or

b) The reference to the liability for defects centrally - for example under GTC - of the footer "Information on liability for defects: The liability for defects is governed by clause XXX of the GTC (link to the corresponding place in the GTC)" or

c) "Information on liability for defects: If you are a consumer, the statutory provisions on liability for defects apply. For entrepreneurs, our GTC apply." (LINK)

Re 6. c) Information on the existence and conditions of after-sales service, after-sales services and guarantees

The consumer must be specifically informed about the existence and conditions of after-sales service, after-sales services and guarantees before the conclusion of the contract. References such as "5-year manufacturer's warranty", "10 years against rusting through" or similar without explanatory additions are inadmissible and anti-competitive.

Any additional "guarantee" on an item must include:

  • the reference to the consumer's statutory rights and to the fact that they are not restricted by the guarantee, and
  • the content of the guarantee and all essential information required for the assertion of the guarantee, in particular the duration and the territorial scope of the guarantee protection as well as the name and address of the guarantor.

This could be designed within the framework of an online offer as follows:

Example "5-year manufacturer's warranty* (...) *If a warranty is stated in the item description, your statutory rights against us in respect of defects remain unaffected by this. You can view the content of the guarantee and all essential information required for claiming the guarantee here (link to the guarantee conditions of the guarantor)."

The online trader makes the manufacturer's warranty his own. He is liable for the declaration. In particular, guarantee conditions from foreign guarantors are often inadmissible under German or European law. Therefore, warranty conditions should never be accepted unchecked.

⇒ All items with "guarantees" are to be checked and processed accordingly.

⇒ Changes to the general terms and conditions (GTC) required

⇒ Technical change to the ordering system

Re 6. d) Information on the duration of the contract or the conditions of termination of open-ended contracts or automatically renewing contracts

In the case of offers aimed at establishing continuing obligations (e.g. subscription contracts), as of June 2014, the term of the contract or the conditions of termination of unlimited contracts or automatically renewing contracts must be expressly indicated prior to the conclusion of the contract. Information must be provided outside the GTC. According to the current interpretation, this information should also be provided in a linked reference to the GTC.

⇒ Changes to the general terms and conditions (GTC) required

⇒ Technical change to the ordering system

Ad 6.e) Information on the functioning of digital content, including applicable technical protection measures for such content; and

Ad 6. f) Information on limitations to the interoperability and compatibility of digital content with hardware and software, insofar as these limitations are known or must be known by the entrepreneur.

The descriptions of products with "digital content" must be supplemented in corresponding detail. In particular, the hardware and software environment for product use must be described in detail.

⇒ Technical change to the ordering system (item description)

Re 6. g) Information on delivery restrictions and accepted means of payment

In future, it must be clearly stated at the latest at the beginning of the ordering process whether delivery restrictions exist and which means of payment are accepted. Restrictions such as "delivery free to the kerbside" must be communicated before the order is placed.

The selectable payment options must be specified before the order is placed. The usual selection at the end of the ordering process is no longer sufficient. A centrally retrievable information on payment conditions should be provided. The GTC should be amended accordingly.

⇒ Changes to the general terms and conditions (GTC) required

⇒ Technical change to the ordering system

Re 6. h) Formal requirements for the fulfilment of information duties

All information must be available to the consumer in a clear and comprehensible manner before the consumer makes a contractual declaration. Internet shops must also fully comply with this requirement for orders placed via smartphones.

⇒ Technical change to the ordering system

Re 7: Obligation to confirm a distance contract

In the case of distance contracts, the trader is henceforth obliged to provide the consumer with a confirmation of the contract reflecting the content of the contract on a durable medium within a reasonable period of time after the conclusion of the contract, but at the latest when the goods are delivered or before the performance of the service is started.

This new regulation must be observed in particular when ordering by telephone!

⇒ Technical change to the ordering system

Re 8: New right of withdrawal

The innovations:

  • As of 13.06.2014, there is only a right of withdrawal, no longer a right of return.
  • The withdrawal period is 14 days.
  • The revocation must be expressly declared by the consumer. Simply returning the goods is no longer sufficient.
  • A standard withdrawal form for consumers must be kept available. However, it is not mandatory to use this form for the declaration of withdrawal.
  • The revocation can also be declared by telephone.
  • Services received, this applies on the one hand to the return of the goods and on the other hand to the refund of the purchase price, must be returned after 14 days at the latest. In the case of a refund of the purchase price, the trader must use the same means of payment.
  • The trader can refuse to refund the purchase price until he has received the goods back or the consumer has provided proof that he has sent the goods.
  • The internet trader no longer bears return costs if he has previously instructed about the specific return costs in the cancellation policy. Example: Four products are purchased. One product weighs 10 g, another 10 kg, a third 100 g, but has an unusual packing volume. The return costs for the case of revocation would have to be calculated for all goods and all return combinations specifically also for the revocation of each individual product or the revocation combinations and presented in the revocation instruction. Currently, even internationally active online traders are not in a position to create these instructions. Software solutions are currently unable to do this.
  • In the event of a revocation, the costs of delivery shall be reimbursed as before. However, this only applies to a normal form of delivery (standard delivery). Additional costs for an express delivery are no longer to be reimbursed.
  • In future, compensation for loss of value will only be limited to the loss of value of the goods.
  • An exclusion of the right of withdrawal applies to the delivery of sealed goods which are not suitable for return for reasons of health protection or hygiene and whose seal has been removed after delivery. This exclusion is currently still unresolved and should be used very cautiously. - A right of withdrawal is excluded for the delivery of goods that have been inseparably mixed with other goods after delivery due to their nature. (Ex: liquid gas or heating oil)
  • The consumer is generally obliged to return the goods, even in the case of goods that cannot be sent by parcel post, unless the trader has offered to collect the goods.
  • The consumer's right of withdrawal expires at the latest 12 months and 14 days after the conditions for the start of the period have been met (irrespective of whether the information on withdrawal was correct).
  • The new cancellation policy is no longer a uniform model, but the official form must be specifically adapted. Among other things, the following must be taken into account
    • the revocation by telephone
    • Start of deadline
    • Total delivery
    • Partial delivery
    • Collection of the goods
    • Return by the consumer
    • Return costs

The form used in the respective online shop or in the catalogues must be adapted to the specific case in order to avoid warnings. However, not all conceivable combinations can be explained within the scope of this information. The cancellation policy and the general terms and conditions must be adapted in due time. After 12 June 2014, the old revocation instructions may no longer be used. The use of the new texts is not permitted before 13 June 2014.

Provided that the preparations have not yet been completed, there is an urgent need for action.

⇒ Changes to the general terms and conditions (GTC) required

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